Headlines:
- Russian wheat prices rise with the rouble
Soybean futures fell for the third-straight session, after unexpected weekend rains in Argentina, while wheat futures rose on a weaker dollar. The new US president Donald Trump on Monday signed an executive order withdrawing from the proposed Trans-Pacific Trade Partnership (TPP), which would have reduced barriers to trade with many economies, including Japan, Australia, and Malaysia. The scrapping of the deal, which was never ratified by the US Congress, was widely expected. “It could be negative long-term if additional bi lateral agreements do not occur,” said Darrell Holaday, at Country Futures. Of more pressing interest will be just how far Mr. Trump will go to renegotiate the 17-year old North American Free Agreement, with TPP countries Canada and Mexico. The dollar reached down some 0.4%, to a six-and-a-half week low against a basket of world currencies.
- Hedge funds buy ags at fastest rate in 6 months – will spree continue?
Worries over Argentine wetness and low US winter wheat sowings prompted hedge funds to hike their net long in ags by the most in six months – provoking concerns that the buying may have gone too far. Managed money, a proxy for speculators, lifted its net long position in futures and options in the top 13 US-traded agricultural commodities, from corn to sugar, by 113,672 contracts in the week to last Tuesday, analysis of data from the Commodity Futures Trading Commission regulator shows. The buying spree drove the net long – the extent to which long bets, which profit when values rise, exceed short holdings, which benefit when prices fall – to its highest since July, extending the apparently enhanced appeal of ags so far in 2017. In three weeks, hedge funds have now hiked their net long in ags by more than 215,000 contracts, helping ag prices , as measured by the Bcom ag index, rise by 7.2% so far in 2017.
Summary:
President Trump’s trade policies have been on the forefront of headlines today. The US has officially pulled out of the Trans-Pacific Partnership (TPP), a 12-nation trade pact that the Obama administration orchestrated. Instead, the Trump administration will negotiate trade deals with each nation separately.
“A great thing for the American worker, what we just did,” Trump said as he signed the executive order that leaves the remaining 11 TPP countries facing an uncertain future.
The US Dollar was down about 75 basis points and Crude Oil was down about 35 cents on the day. Despite starting the day in weaker territory Corn and Wheat were able to recover and finish either flat or on the positive side of the ledger. Soybean was down about 12 cents intraday but finished well off the lows losing only 7.50 when the dust settled. Weather improvements over the weekend kept bullish traders at bay but it the pause in the market is also in concert with prices reaching already pre-established resistance levels. Fund managers appear to bullish on the Wheat complex. Wheat is close to critical levels currently and we will look to see it if can still maintain its momentum.
