Weekly Wakeup: What Will Drive The Market This Week

Weekly Wakeup: What Will Drive The Market This Week

Top of the mornin’ to ya. Saint Patty’s day may not be a market maker but now that the historic  “pi” day (3.1415)  is behind us, it is the big social media event. On a more business-like note, Sunday evening, the dollar, corn and beans all are lower. The week starts with the monthly National Oilseed Processors Association (NOPA) report from Thomson Reuters. It includes 12 member companies that account for 95% of the U.S. soybean crush. Trade expectations are for about 148.5 million bushels crushed in February.  

Wednesday’s minutes from the Federal Reserve’s Open Market Committee will draw interest as traders await higher interest rates. Friday brings the cattle on feed report. Red margins raise the question of how many replacements are going into lots at the robust prices we’ve seen. One large feedlot manager told us running at 80-85% capacity is pretty standard at this point.

Weekly exports (Monday) and export sales (Thursday), as well as ethanol grind round out the week. Ethanol returns over operating costs as estimated by Iowa State University/CARD have been minimal since the start of 2015. Should the price of ethanol or co-products drop, the profit situation would be even worse. Demand  is the driver for soybean products as well, and last week meal lost 70 cents and oil 79 cents—not good for processors.  

It’s also likely the value of the dollar will be watched all week with strength seen as making it harder to sell U.S. products. Much of its fate depends on moves by the European Central Bank and other factors. While the United States has been critical of Beijing for not allowing the yuan/renminbi float in the past, perhaps U.S. ag exporters now are lucky it hasn’t since it hasn’t seen the impacts of the strong dollar that many buyers have!  

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