9/17/24
Market thoughts…
China could start to mess with the US Farmer, sooner than later. The US tariffs on China’s EV’s will be in effect starting on September 27th. If China decides to retaliate, I am guessing they will hit the agricultural sector first, probably starting with the Soybeans. China has been stockpiling Soybeans for a while, and if they put a huge tariff on the Beans or just stop buying them, what will happen with all the Soybeans and the price? If this were to happen, it would be at the same time harvest is in full swing. Prices tend to break during harvest anyway, and potential tariffs would put heavy pressure on a Market I feel is already overpriced. I spoke with a couple Farmers in Illinois this morning, and they are expecting huge crops for the Corn and Soybeans. Granted it is some of the best land there is, but the numbers they were talking about were off the charts. I have structured new long-term Soybean trades, and they are three, six and nine months out. My long-term view of these Markets has been accurate, and if you are interested in seeing my new trades, let me know. The Fed is expected to cut rates tomorrow, and the more I think about it, the more I believe the Fed will screw it up. If the Fed does nothing, the Stock Market will probably break. If the Fed lowers the rate by ¼ point, which is the most likely outcome, it might be looked at as too cautious and the Stock Market could break. If the Fed lowers the rate by ½ a point it could spook the Stock Market and send it lower. Lowering the rate by more than ½ a point is dumb, but anything is possible. The Stock Markets have been on a run higher for a while, and the rate cuts are probably already priced into the Markets. I think there is a good chance for the Stock Markets to break, regardless of anything the Fed does or does not do. The reason I am saying this, is because I am expecting a break in the Cattle Markets tomorrow, and probably across the board for most commodities. Buy the rumor, sell the Fact… BALLEN@WALSHTRADING.COM
Just Added:
CONAB says Brazil will plant 3% more Soybeans this year, with production estimates of 166.28 million tonnes, up 12.82% from last year. The USDA has Brazil’s production estimate at 169.24 million tonnes. Combined with our ending stocks, that’s plenty of Soybeans. I feel there is a good chance the Soybean Market will break tomorrow, but I felt that way already.
-Bill
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Bill Allen
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