As we begin this new work week, it would seem that the story that overshadows all others is the news that there is a second company that reports great success with a Covid vaccine. In clinical trials, U.S. based Moderna’s vaccine has shown a 94.5% efficacy in treating the virus. This is slightly better than the 90% positive result for the Pfizer vaccine that was heralded last week but possibly more important is that the Moderna vaccine can be stored for up to six months at a temperature of minus 20C (-4F) and once thawed and kept refrigerated between 2C and 8C (35/46F), would remain stable for 30 days. The Pfizer-BioNTech product needs to be stored at minor 75C (-103C) and could only be refrigerated for 5-days. While there will undoubtedly be more companies to announce results in the near future, Johnson and Johnson and Astra Zeneca are in trial stages; it is certainly welcome news as the U.S. and global cases skyrocket again. Granted, it will be months and months before there is widespread availability, equity markets understandably received the news as positive. While not quite into new record highs, the S&P 500 is knocking on the door.
While wheat is a bit sluggish to begin the week, corn and beans show us a little optimism but, thus far, remain within last week’s parameters. Let’s keep in mind that as a group, we are pressing against what has been the highest level traded since late 2014, so we are going to require a steady diet of bullish news to keep this beast satisfied. Keep in mind as well that after this week, we technically enter the holiday season.
There does appear to be one group of farmers who have been taking advantage of the advance witnessed this fall; Brazilians. According to the private consultants, Datagro, farmers in that nation have now sold just over 53% of their estimated bean production for this coming year and 21% of full-season corn, and almost 39% of the safrinha crop, which has not even been planted. With a Chicago futures rally and a currency that continues to sit on historic lows, it is quite understandable why they have been this aggressive.
The only news from China this morning is that in October, the hog herd was 26.9% above last year, and the sow herd 31.5% higher. They also reported that their economy grew 4.9% year over year last month.
Looking at the macro trade as we begin the week. I already spoke about the strong equity trade, but we find optimism in energies as well. Metals and financials are under pressure, and the Dollar is flat.