All the news continues to dwell on Trump rhetoric in regards to “possible” trade wars with China and Mexico.
I’ve read a few different scenarios and the one I think more credible than any would be the counter strategy China may take. Some punters are suggesting China may well devalue its currency to counter trade barriers by the US. This would decrease China’s ability to import from America but would also devalue other currencies like the AUD who trade with China. It would also make little difference to traded between China and their new best friend Russia. So less likely to hurt Chinese imports from other nations. It might also mean that US dollars that are currently held in China increase in value for those holding those US dollars.

The major US punters are expecting a volatile end to 2017 as the Trump government starts to implement those policies they can actually get through the senate. This may see an increase in options trading to help protect US traders from volatility.

Fundamentally very little has changed, global grain stocks continue to cap any potential upside. During the week western Canadian cash durum bids have increased a little across some regions while US durum bids are also firmer for the higher grade product. Rain is concentrated over the western US corn belt and freezing conditions and snow melt are causing some concern across the Ukraine.