Weekly commodity wrap-up

Hot temps in August rally soybean prices

The month of August could not have started any better for U.S. soybean farmers with cooler than average temperatures and a wide coverage of rain showers. Unfortunately, the next seven to 10 days is forecast to be uncomfortably warm and short on moisture for the Plains and a large swath of the Midwest.

Soybeans are made in August and the second half could be a low scoring defensive battle. November soybean futures rallied $.46 for the week by Friday morning to reach $13.54 per bushel in anticipation of the warm weather.

Traders will be watching the market open closely come Sunday evening to catch the last gasps of weather volatility trade for the year before the last of the unknown yield potentials become known at harvest.

Stocks retreat

Inflation has cooled and interest rate hikes are projected to stall out sooner rather than later with hopes that a recession can be avoided. But both the Dow Jones and S&P 500 were down over 2% this week by Friday morning.

This week’s downturn follows what had been a sizable rally in the stock market through the summer months, so it is not all doom and gloom. The lower week could be as simple as a seasonal pull back, but there was another round of troubling economic news from China this week in what has become a reoccurring theme. Among the latest batch of economic data out of China was a report that property investment had fallen for a 17th consecutive month and that China had suspended publishing youth jobless data after it hit a record high of 21.3% in June.

The world economic ties that bind have become more fragmented post COVID-19, but Chinese troubles will not occur in a vacuum either and investors can’t be made to believe that a tree falling in the forest does not make a sound even if no one is allowed to report it.

Have a comment or question? Please reach out to derrick.hermesch@pinion.global.com

Opinions are solely the writer’s. Derrick Hermesch is a commodity futures broker with Pinion. He can be reached at 785-338-9605. This is not a solicitation of any order to buy or sell any market.