- Paris, MATIF, wheat futures have traded to a high not seen since August and Russian wheat export prices have now risen for nine consecutive weeks, which is somewhat different from the flat Chicago wheat futures picture.
- Today has seen Chicago futures trade back and forth with funds somewhat less active that yesterday. It has been suggested that yesterday’s rally was sparked by Goldman Sachs advice to be overweight in commodities for the first time in some four years. This, together with the Trump administration’e expected huge infrastructure spending spree has sent soybeans and commodities higher. What is being coined the “Trump Trade” has fund managers in a rush to secure stocks and hard assets based upon rising inflation.
- In the wake of recent fund buying it seems that funds are back to a net flat ag futures position (corn, wheat, soybean, lean hogs, live and feeder cattle). Will funds go long has been a common question in recent days. So far there has been no evidence of inflation but with the Trump administration wanting to lower tax rates and spend on infrastructure, it would seem likely that we will see a return to modest inflation that would bolster the US$ and see US interest rates rising. This could, in turn, see some bullishness injected into some of the ag markets.
- In Chicago, March corn is getting close to $3.60 and January soybeans to $10.31 resistance. Even March Chicago wheat should uncover resistance above $4.30. The CBOT is trading money flow which is supporting today’s rally in reduced volume. We suspect that this rally effort is nearing a peak, and seasonal trends turn down following the Thanksgiving holiday.