Headlines:
- Sugar futures slump on Brazilian cane crushing data
Sugar futures tumbled further, under pressure from a slightly bigger than expected cane crush, and technical selling. Data from Unica, the Brazilian cane body, dashed ideas that the rain severely hampered the harvest in the country’s Centre South cane belt. March raw sugar futures were down 3.6%, at 20.39 cents a pound, after breaking through the 100-day moving average in the previous session.
- Present elect Trump is expected to soften his stance on trade policy. China will take retributions if Trump imposes a 45% import tariff on Chinese products. China buys a high percentage of U.S. soybeans and any major disruption could have a catastrophic effect on exports.
Summary:
It has now been one full week since the presidential election and pulse of the markets in general over that time horizon was far from the negative aspirations of the media in general. Over the last seven days Gold Futures, Crude Oil Futures and the US Dollar have all risen. The US Dollar reached its highest value in about thirteen years. Analyst’s expectations is that a strong US Dollar will add pressure to US Soybean exports. The US has a large harvest this year for Corn, Wheat and Soybean so the possibility exists that our supply may prove to not be very competitive in the global market. At the same time survey show that 75% of US growers support President-Elect Trump. Expectations are he will implement policies that are pro-agriculture.
There was no follow through today after rally late in the day yesterday. Positive news from the NOPA Crush figures yesterday pushed prices higher. Today Corn was essentially flat dropping 1.75 cents (0.50%) on the day. Soybean was off 4 cents (0.40%) and Wheat lost 2.00 (0.50%). Today the USDA announced new Soybean exports. Private exporters reported export sales of 165K metric tons of Soybean for the 2016-2017 marketing year for delivery to China. China’s appetite for US beans continues to be solid but if the US imposes high import tariffs the possibility of US Soybean export disruptions could arise.
Crude Oil futures was off about ¾% on the day after reaching resistance intraday. OPEC Members are scheduled to meet at the end of the month. One of the topics of discussion on the table revolves around the possibility of production curbs and Crude Oil price stabilization.
