Headlines:
- This week normal trading hours through Wednesday. Thursday Thanksgiving Day – no markets. No night markets, as they resume trade at 8:30 a.m. Friday morning, closing early at 12:05 (All Central Time).
- Trump Will Start to Exit from TPP on First Day as President. China is pushing for an ‘Asia-wide’ trade pact, if it appears the US backs away from the proposed TPP initiative
- Goldman Sachs and Chinese speculators fuel soy market rally
The rally in soybean futures continued, as funds pile into the oilseed, but what is fueling this fund buying? One factor is that Chinese soy-complex and vegoil markets are once again in bull-mode, after the government stepped in to cool speculation last week. Key to this buying is the weakness in the yuan, which on Monday reached eight-year-lows against the dollar, after a 12-day slide following the wake of the US election. There was a slowing of this trend on Tuesday, as the government fixed the tightly-controlled currency’s trading band stronger against the dollar, but the currency remains very weak compared to two weeks ago. And with the currency sliding, speculators have stepped in. “The perception of a continued weakening Chinese yuan fueled bean complex buying interest in futures markets.
Summary:
According President-elect Trump will start to exit from the 12-nation Trans-Pacific Partnership (TPP) on his first day as President. In response, China is pushing for an ‘Asia-wide’ trade pact. The media has reported that the trade pact has the support of many in the agriculture sector. Trump intention is not to just simply pull out of the agreement but instead he is looking to “negotiate fair bilateral trade deals that bring jobs and industry back onto American shores.”
Soybean futures posted double digit gains once again. The March contract was up 11.25 and the July contract was up 10.50. Corn and Wheat were neutral on the day. Both March Wheat and March Corn rose 1 cent. Traders are preparing for the Thanksgiving Holiday break. In the absence of domestic news it seems that this week that the primary driver of the grain markets will be world events. The likes of currency movement and South American planting progress should be factors to look for this week.
The Corn harvest is essentially finished for weather will play a much smaller role in moving the price action. Despite the recent strength in the USD Corn has shown reasonably strong export sales numbers. The demand has help to stabilize price. Year to day shipments are up about 21% from a year ago for Soybean and it is this very same record demand mentioned by the USDA that has been responsible for the recent Beans surge. Dry weather is in focus as the Wheat growing regions go into dormancy.
