Prices 19/5/17

Category:

I went to a meeting about how to use futures and options in grain marketing back in around 1999 or so. I remember one think that is ringing true about how a cash price is made, you’ve all heard it, futures + basis + currency. Well this guy through in a 4th variable, politics. Politics can have a massive impact on prices, changes to subsidies, insurance programs, currency manipulation, single desks, they all play a major roll and can swing prices wildly if sudden changes are made.
This brings me to US soybean futures and how they managed to shed 31c/bu in overnight trade. Yes the soybean crops in S.America are big and odds are the US grower will plant a wing of them too as nothing else is worth anything but last night’s move lower was basically started when bribery allegations were made against Brazil President Michel Tremer, this crashed the real against the US dollar, which made the return in US dollars per tonne to the Brazilian farmer jump nicely thus they sold up beans.
Being the eternal sceptic that I am I may have thought the US media may have also thrown the “hey look over there” story at the public pretty hard too after the last week of Trumpmania.
Wheat futures survived the pressure from the soybean pit pretty well, spring wheat futures at Minneapolis even managed a higher close. Severe storms across Kansas are also preventing wheat there from recovery from the snow storm a couple of weeks ago.

TAGS: