Storm clouds are gathering
Often when we hear the phrase, “storm clouds are gathering,” it is an allegory to some type of impending disaster or possibly even war, but of course, in the ag trade, we can take a much more literal interpretation. Granted, for some, i.e., those in the eastern corn belt that have already been receiving excess H2O, this projected moisture accumulation map could look rather ominous. Still, for much of the rest of the Midwest, it will be quite welcome. No doubt there will be some regions that get the short end of the stick, or rain gauge in this case, nor will the front be enough to correct the drought situation, but as we rapidly approach the corn pollination window, it is certainly welcome.
While no doubt, part of the sales that were rumored last week which were partially announced on Monday, the USDA did confirm more beans sales to China the morning. This time they reported 330,000 MT for the 2021/22 crop year. The weekly sales report will be issued in the morning, but of course, the reports that everyone is looking forward to, or for some, dreading, will be the quarterly grain stocks and final acreage number coming up on the 30th.
While not quite as high as expected, the current account deficit for the first quarter of this year increased to a 14-year high of $195.7 billion. Economists were expecting a figure of nearly $207 billion. Exports of goods increased $24.5 billion to $408.6 billion, while imports of goods were up $39.9 billion to a record $677 billion. For services, export grew $1.7 billion to $175.9 billion, while imports increased $1.8 billion to $120.2 billion. This means that the trade gap reached 3.5% of our GDP, which was up from 3.3% in the fourth quarter. By the way, the fourth-quarter figure was adjusted down from $188.5 billion to $175.1. Regardless, this most recent number is the largest since the fourth quarter of 2008. The financial and equity markets greeted the news with a yawn. Financial instruments and equities are flat this morning, with the dollar trading fractionally lower. That said, the dollar is on track to record a solid gain for the month, and as I have commented previously, longer-term indicators appear to point to additional dollar strength in the weeks and months ahead. Not only could this be a drag on the commodity markets, but it would not suggest we will see any improvements in the trade deficits either.
