|
Happy Turnaround Tuesday. In contradiction to yesterday being red across the board, today the CBOT is shining green. We did not make back all of our losses from yesterday, but it is a start. We've been in commodity deflation mode since mid-June of 2022 as managed money fretted about the anticipated recession that was going to reduce demand for commodities. Now, we are watching headlines day-to-day as Traders continue to await coming crop production numbers, with the first of those due from CONAB tomorrow early morning. Brazilian private consultancy Grupo Labhoro lowered their estimate yesterday to 145-147 mmt's..
The driest parts of central and northern Brazil continue to receive rains. The weather pattern is expected to shift in the 6–15-day forecast… but as of right now, those areas are receiving beneficial moisture. It’s hard to rally a market on a drought while it’s raining. Overall market sentiment is that the dry pattern in Brazil has taken the top end of the crop off, BUT, does good growing weather in Argentina replace any short comings in Brazil for the world market? Parana's state crop agency reported today that 71% of its soybean fields are in good condition vs. 86% last week. Parana is the third largest soybean producing state in Brazil. Some showers are in the forecast.
There’s a presidential election in Taiwan this weekend, with far reaching geopolitical implications. The two primary candidates are from the Democratic People’s Party (DPP) and the Kuomintang (KMT). The DPP platform wishes to maintain momentum toward Taiwan independence generated during the current administration, while the KMT wants to improve relations with Mainland China. Chinese authorities have already stated that a DPP victory would be problematic, raising the likelihood of increased tensions between China and Taiwan. Make no mistake about it, that China fully intends to take control of Taiwan in the end. It would prefer to do so through peaceful means, maintaining the resources and infrastructure of the island nation while minimizing risks of a direct war with the United States, but it will do what is necessary to achieve its goal in the long run – at least that’s its intention.
Funds were thought to have been mostly buyers.
| 
