Wednesday, November 9, 2016

Commodities: Ahead of Today's USDA World Agricultural Supply and Demand Estimates Report, Analysts Talk Politics (WASDE)

Last Chg
Corn 350-6-3-4
Soybeans 1014-4+3-2
Wheat 413-4-1-6

From Agrimoney, some analysts opining on stuff:
Trump's victory - what will it bring for farming and investors?

Is Donald Trump's victory in the US presidential election a setback for investors and agriculture, or will it bring opportunity?

Leading commentators give their thoughts. 


"The first reaction of financial markets has been strong with a sharp decline of the dollar and stock markets.
"Volatility will be back today on financial and currencies markets and will impact agricultural commodities.
"A lasting decline of the green back would offer a gain of competitiveness for US origins."
Societe Generale
"Markets are swooning from uncertainty. Vix [a volatility index, and the so-called gauge of fear] could reach 25-30% level and stay there for a while.
"The odds of a December rate hike have fallen appreciably, a support to global risk assets. The Fed is caught between the data (favourable) and the markets/Trump which are uncertain.
"Next to watch is Trump's selection for key cabinet positions. These choices may be calming or may invoke more concern."
After inauguration day on January 20 "Tax cuts could be a more immediate benefit. Protectionist trade policies are likely to be less substantial but will stretch over a longer period of time

Mark Haefele, global chief investment officer, UBS

"The market reaction to the outcome will come in two stages.
"A reflexive flight to safety has already occurred, with Treasury bond prices rising. The US dollar has declined around 1% on a trade-weighted basis, while safe-haven currencies like the Japanese yen, up 2.9%, rallied against dollar. And gold also climbed 3.6%.

"While these first-round effects are certainly disconcerting, we expect the US equity market to recover over the medium term.

"For fixed income markets, we believe the initial rally in Treasuries will be relatively short lived.
"Longer term, Trump has promised tax cuts without offsetting expenditure reductions. A deteriorating fiscal outlook could push government borrowing costs higher.".

Here's the USDA's WASDE page.