Agriculture's Big Picture

Markets are down across the world, except in China.

 

In Germany, the DAX is down more than 2.00%; the FTSE in London is down 1.63% at 6:30 a.m.; and the Nikkei in Japan closed 2.45% lower.

 

China’s CSI 300 Index in Shanghai was the bright spot overnight. It closed 1.57% higher.

 

Oil, gold and other commodities are also showing weakness.

 

Livestock Slaughter is released at 7:30 a.m. CT

Cattle on Feed released at 2:00 p.m. CT

Cold Storage is also released at 2:00 p.m. CT

The Senate passed a major banking reform measure last night. The bill aims to get tougher on lenders and borrowers in the process. Of course, this isn’t a done deal yet since it now goes to conference with the House before a final bill is voted on by both houses.  

There are calls that the European economy is now headed to a double-dip recession. You think? That may be the most understated "well, duh!" in the history of finance. The euro continues its value freefall and the dollar continues to gain strength. It seems the euro is the larger factor of the two, according to the London Times. Fear over the euro is driving down stocks around the world.

 

To stave off the effect, the European Union is pushing forward on a massive bailout package for troubled governments. It got around a major obstacle today with the lower house of the German Parliament approving the package.

 

Could the dollar’s strength and the weakening Brazilian real be to the benefit of Brazilian farmers? Brazilian farmers buy inputs in the real, but their produce is based on the dollar. Translation: If a bushel of soybeans was R$1 a week ago when the dollar was weaker at $0.60 to R$1, today that same bushel of soybeans is still R$1. However, the dollar is worth more and so is that bushel of soybeans on the world market.

 

I’m not saying expansion will happen in Brazil, but keep in mind one of the most limiting factors for expansion the past few years had to do with conversion rates. Just saying.

 

Secretary of State Hillary Clinton reiterated the need for South Korea to retaliate against North Korea. A North Korean torpedo sank a South Korean warship last month, which was just confirmed earlier this week. South Korea is likely to retaliate (though its president has been hesitant to say so) and if it does, Kim Jong-il, the president of North Korea, has promised a full-scale war. For now, the United Nations is trying to handle the situation and it will likely impose sanctions on the North. Is it just me, or does it seem like that Kim Jong-il doesn’t really care about sanctions, since it hurts his people and he’s relatively immune to any pain associated with them?