By: Dan Hueber –
Once again fund selling weighed on the grain and soy complex yesterday, pressing prices back towards recent lows and/or support and once again, value buyers appeared to treat this as a gift as globally they stepped forward yet again to grab these seeming bargain basement prices. Now certainly, there would not appear to be any risk that shelves will not remain completely stocked, but for some at least, the deals look just too enticing to pass up. You know how it is? It may be 90-degrees in the middle of summer but you know winter is coming and those deals on sweaters and parkas will not be around after the temperatures dive and the snow begins to fall. Note that the combination corn, beans and wheat chart reflects prices that are sitting on the low end of the range for the past 11-years and to slip below that point would return us to the pre-ethanol era. It would seem that the sales reported this morning; 132,000 MT of beans to China and a whopping 1,080,000 MT of beans (6th largest single bean sale on record) to unknown destinations, of which 960,000 is for 17/18 and 120,000 for the 18/19 crop year, would seem to be a verification that indeed, there are those who feel these prices present value.
Yet again yesterday we were reminded of the enormous forces that mother nature and this earth can unleash as a 7.1 magnitude earthquake rocked Mexico, the second in as many weeks, with the latest death toll rising above 220 people. It is truly stunning when to look back at just the past month or so with hurricanes Harvey and Irma wreaking havoc and destruction on Texas, throughout the Caribbean and into Florida and beyond, Jose following that and now Maria bearing down on Puerto Rico and who knows where from there and yet here we are, relatively early in the hurricane season. In ancient times, it is likely that people would have feared that the gods were upset and doling out this punishment for our misdeeds and sinful ways and looking around at the mess this world is in right now, it does not seem too far a stretch to believe such. Of course, today we have a greater understanding of geology, climatology and the seasonal nature of such events so no need to begin offering up any sacrifices. That said, it is stark reminder that we really have very limited control of what can happen, but what we can do is provide assistance and support to those impacted when tragedy and misfortune arrive, regardless of how large or small. Therein we uncover the true character and spirit of a people and a nation.
Last and possibly not least today, markets are awaiting the post meeting press conference from the FOMC gathering, which is scheduled for 2:00 EST. As I discussed yesterday, the financial market anxiously await to see if there are any guidelines or plans for when the Fed will begin to reduce its enormous balance sheet. This morning in those markets, we find equities very flat, financial instrument a touch higher (lower rates) and the U.S. Dollar a touch lower.