Grain and livestock futures see early pressure after a mixed start.
Darin Newsom with Barchart says ag markets continue to ride the roller coaster of headlines about tariffs and policy changes being imposed by the Trump administration.
This is driving fund and algorithm trading.
When will the market get numb to the headlines and get back to trading its own fundamentals?
Newsom says, “We saw this in the first Trump administration where every time President Trump tweets a comment about trade or tariffs.”
He says it may take some time for the market to readjust.
For for now increased volatility will continue in the market place and it’s driving money flow in the commodity and financial markets.
Exports this morning were strong for corn at 58.2 million bu., solid for wheat at 16.1 million and but slow for soybeans at 14.2 million bu.
Newsom says soybean export business from China has died with the Lunar New Year holiday and as they switch over to sourcing soybeans from Brazil which is harvesting their new crop right now.
South American weather has been flip flopping with rain Wednesday weighing on the corn and especially the soybean and meal markets.
For now, Newsom says the technicals in the market don’t really matter.
However, March corn has been unable to close above $5 and soybeans are trading back below their 200 day moving average, while all three classes of wheat are still above their 100 day moving average.
The wheat market, according to Newsom, has been seeing fund short covering but he’s not sure if its changing trend yet or if the trade is watching the increasing global production concerns especially in Russia.
Currently wheat prices have been moving higher for both Russian and European wheat.
Regarding tariffs, Newsom says they are regarded by the trade as inflationary and may continue to drive a higher dollar, especially in relation to other world currencies, and make it difficult for the Fed and the market to ease interest rates.
