The Federal Reserve cut interest rates by 50 basis points on Wednesday.
The cut was largely anticipated and so it was already priced into the financial and other markets according to Darren Frye with Water Street Advisory.
He says the markets are now looking forward to determine the additional cuts through the end of the year.
Frye says the move is positive for the agricultural markets because the change in monetary policy will weaken the U.S. dollar index.
That makes the United States more competitive with other export customers and should lead to additional business.
“A lower dollar means higher commodities,” he states.
Grains ended mixed and all the ag markets traded two-sided positioning ahead of the announcement.
Frye says the soybean market was supported by positive supply and demand factors, including disappointing early yields in the Eastern Corn Belt and an increase in export business, particularly to China.
Soybeans did see some early technical buying and managed to get above the 50 day moving average but could not hold that level into the close due to a pick up in harvest pressure and hedge selling.
However, Frye thinks the market will continue to move higher.
Corn ended flat on the day caught in a tug of war between lower wheat and the higher soybean futures.
Wheat saw pressure on profit taking after failing to take out chart resistance plus forecasted rains for the Southern Plains winter wheat areas.
