Risk-Off Attitude Resurfaces

March 18, 2013 12:57 AM

What Traders are Talking About:

* Cyprus triggers risk-off movement. There's a broad risk-off movement to open the week as a deal to bail out Cyprus is rattling markets and investor confidence. Cyprus agreed on Saturday to levy a tax on bank deposits as part of a bailout deal, although final details are still being hammered out and must pass a parliamentary vote. The European Central Bank has assured Cyprus needed liquidity if the bank levy is approved. Cyprus is a small fish in a big pond, but if the Cypriot government agrees to levy taxes on bank deposits, there are concerns this could trigger other such moves across Europe.

The long and short of it: The old market adage "when in doubt, get out" is coming into play, as euro-zone uncertainty is building, reducing investor confidence.

* Argentina averts killing freeze. Areas of central Argentina dipped into the mid- to low 30s over the weekend, which led to spotty frost, but temps didn't drop far enough to prematurely end the growing season, as some had feared. As a result, crops still have a chance to add some bushels if late-season weather conditions are favorable.

The long and short of it: The lack of a killing freeze across central Argentina is adding to the price pressure in soybeans to start the week.

* Brazil strike pushed back. The one-day strike planned for Tuesday by Brazilian port workers has been pushed back one week. Union leaders hope to advance negotiations with the Brazilian government over the privatization of ports. If there is insufficient progress in the talks, however, union leaders say a work stoppage is still possible.

The long and short of it: Labor unrest remains an issue, but the start of the Brazilian shipping season is underway, which has traders believing there will be a dramatic slowdown in export demand for U.S. soybeans.


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