Join Michelle Rook in AGWB market now to break the latest trends in wheat, soybeans, corn markets, interest rates and stock market. Watch the full interview here.
Michel Rock: Welcome to the market now. I am Michel Rock with Darine New No., Sugar Market Local in Parchart. See a lot of red color on the blackboard in the futures and livestock futures trading this morning. Darren, I want to start talking about soybeans. We had a large three -day gathering, 60, 65 cents of gains. Do we only see some profits, do you think here? Have we faced some resistance to the plans?
Darine News: No one, I do not know that technicians have any relationship with the markets these days. My mysterious reaction to this, the reality of the real basics may be drowned. Then this was followed by fictional numbers in the US Department of Agriculture last Wednesday with some of the very interesting figures of soybeans that really test the boundaries of a person’s imagination. This is what it is. The design- the intention for both of these two events was to run the purchase of algorithm, and this is what happened.
Now here we are on Thursday morning, the purchase orders were filled, the market was paid up, and they did not change anything on the plans, and nothing really changed. Certainly, nothing mainly changed. Thursday morning, a vacuum began at the bottom of these things to decrease again as we head next weekend. The focus will return to whether the crop still looks good. What it tells us in the future, that the United States will produce more than soybeans than it asked. This is the summary.
Michelle: Yes, especially if we do not return China to the market and we seem to have kicked the box on the road again here, huh?
Darren: Again, this receives a lot of attention, but China will not return to the market. There were two stories outside the two of the same media company. The first to be released in the middle of the night only repeated the emphasis on what we have known since 2018, that the Chinese buyers have done mathematics mainly with the United States of the global soybean game. This did not change. The only thing is that the situation continues to walk in the same path. China has a long -term vision of anything called war. They take a long -term approach. The United States has a 15 -minute attention.
Four hours later, the story came out of the same media group, for the American President published on social media. Now, I understand that in the past decade, social media has become an official policy. It is not necessary to pass through Congress, and the channels that we are used to think are in place, checks, balances, etc. It is what is published on social media. The truth is, again, and we can see in futures contracts, we can see- sorry, we can see in the differences, we can see in the market in general, the mode of supply and demand has not changed.
China will only buy if there is a kind of weather problem in Brazil. Then this may increase the attractiveness of the American market. Until then, I just don’t see him change.
Michelle: We also had to cancel old soybeans exports. We had the abolition of old crop atom exports. Corn now, new crops look very good. In general, do you think that- is the demand well enough to chew a large crop as we have on the atom?
Darren: Let’s take a look at what happened in the calculated, full commercial load. Both the spread of new crops for corn and soybeans, new crops witnessed an increase in the percentage of the full commercial load calculated during the month of July and during the first part of August. This tells us that he does not expect demand for demand by the commercial side, and not necessarily by the fund. They simply follow up with the basics. They will follow the basics at the end. On the commercial side, those who are already concerned, those who, for example, exporters, final users, large stations or so on, the opinion is that the expected supplies continue to obtain the expected demand. This is what we see in both markets.
It does not matter if the US Department of Agriculture goes out and says, we will produce 18 billion inchs or whatever corn and 5 billion or 3 billion with soybeans, whatever the numbers. I don’t even know. The bottom line is that there will be more supplies with regard to demand. This did not change. No, the request is not accompanied. The fact that we got some cancellation during the first part of August is not very surprising. We are in the last month of corn marketing year and soybeans. If it is not shipped now, it may not be that, which makes the Ministry of Agriculture’s?
Michelle: Obviously, the weather was down to this market, and I cannot remember August as we had better weather, at least to start.
Darren: Yes, this was incredible across the plains, across the Middle West. I love them or hate them, when they deserve, the dehydration observer comes out every week, every Thursday morning. This time, again, like last week, you don’t see any really hot points in all plains, from the northern border of Northern Dakota to the southwestern border of Texas. There is a little at the far southwest edge of Texas, but you take it all the way across the Middle West to Indiana, Ohio, and so on, and there are any formed areas. The weather was close to the ideal this time, at a time when the United States may need some weather problems.
Once again, we can see in the market, again, that the commercial side does not care excessively about what people who are still compensated, are still trying to urge people to circulate these weather problems or the increasing issues that crops have not simply did this year.
Michelle: The money had no weather threats to buy, but let’s talk a little too, as we got the consumer price index numbers earlier last week. In fact, they started somewhat favorable, but the producers’ price index was outside this morning, 0.9 %, that was much higher than expectations. Does this take a rate of September from the table to get the Fed Bank?
Darren: I think it is an interesting discussion. I know that there are dictates that the Federal Reserve will have to reduce prices, but the market does not show us this. While we saw the Future Forward Fount Found curve, we saw that it was about 50-50 chances to see the price reduction at the September meeting. This continues to decline every month, almost as the next meeting approaches. In fact, the meeting that was in the spotlight during the last issue of months was the October meeting by the Federal Open Market Committee.
Do I think the consumer price index and PPI-I know that economists are closely seeing this, but the markets certainly did not believe that we will see a reduction, and I still claim that there is a better opportunity for an average rise before we get the next reduction. Now, I will go to one of the parties, and I always talk about how to see the market and let the market dictate my actions and these types of things, and certainly the market does not indicate at the present time until we see a rise in prices, except for the fact that the US dollar has turned technically at the end of July. Again, can we believe what we see in the plans anymore? i don’t think so.
Currently, I will stay on the margin and say that we will not see a decrease in prices, at least than what I see in the market at the September meeting.
Michelle: We still do not see inflation appear in all data yet. There is little delay in these definitions. When does that appear here, Darine?
Darren: Again, these are governmental numbers, similar to the way in which the US Department of Agriculture can change an acre planted by two, three or four million, whatever they are, the government inflation numbers should not necessarily be based. Whoever hears someone who goes to the store, and does not matter whether we are talking about a grocery store, retail store, implementation of the agent, providing tractors, and whatever that, prices are high. Real inflation. We have seen an increase in inflation. The constant threat of constant definitions and commercial wars had an effect. They continued to have an effect.
This is what ignited the preliminary inflation flames between 2016 and 2018, and it has worsened. Inflation here. This is one of the reasons why I think the Federal Reserve will have to raise prices before lowering prices, because this is the defense against inflation. This is to raise prices to enhance the basic currency, something that the United States needs to see at this stage.
Michelle: With what you just said and the fact that the stock market continued to break new levels, does this keep the money away from the grain market? The stock market still seems more attractive than investing, right?
Darren: It is now. Yes. Markets that go to their highest levels are difficult to consider them. We have seen the highest new levels ever in the S&P 500 and NASDAQ here during the mid -August point. Dow Jones, not yet. While I was speaking in advance, Dow Jones is our ancestors, and I must say, the stock index, more attention is now given to the S&P and Nasdaq as it should. This is due to the discussion of funds that requires a fundamental reason to take care of the commodity sector. Again, this is where they can search for supply and demand. They can circulate the weather. They can trade global crises and these types of things.
Outside gold, as it is a safe haven and raw oil, they fluctuate only near its lowest levels in the sixties of the last century, there is no basic reason for the money that is concerned with the grain sector in general, especially in the three major markets of corn, soybeans and wheat. Until that changes, why do you go to the pills when you get the livestock sector sitting there, a red livestock market? Criticism continues to rise, and it continues to tell us that the supply and demand outside the line in favor of demand for the supply. If the money will move to anywhere to the commodities at this stage, it will be in the livestock sector.
There is no main reason for them to take care of the grains. The stock markets work well, and the livestock is hot. There are many other markets that provide a better opportunity.
Michelle: No, it’s definitely not a good look. Good. Thank you very much. Darine New No., Senior Market Zolopers in Barsht. This is the market now.
On the date of publishing, Darren New (either directly or indirectly) did not have positions in any of the securities mentioned in this article. All information and data in this article are only for media purposes. This article was originally published on Barchart.com
