Wednesday March 4, 2020

  • The U.S. government cut interest rates yesterday to help spur economic activity to counter a slight decline that has resulted from the spreading corona virus
    • American economy is not quite sure how to take the action just yet as up to this point they haven’t seen major affects from the virus and the actions have stirred up fear that the situation is going to worsen
  • Argentine intends to raise export taxes on soybeans and soy bi-products from 30% to 33% – any news for beans to be more difficult to pull out of South America is encouraging for American bean markets 
  • The Brazilian soybean crop continues to roll into ports now 43% complete and only seems to be getting larger – Informa estimates a 128.0 MMT production
    • some slight delays in ports so far due to weather but overall no major concern surrounding the crop
      • the lack of concern about the crop will translate into concern over North American bean prices 
  • Pollution is helping the bean market??
    • What do I mean by this: NASA images show pollution levels in China comparing the first half of January 2020 to February 10-25 has dropped significantly
    • The dramatic decrease in pollution in less than a month is being partly contributed to the spread of corona virus 
      • record declines in factory activities as manufacturers stopped work to help contain the spread as well as a mass decline in transportation both limit pollutants entering the atmosphere 
    • Now note the decrease does also coincide with the lunar new year which typically limits pollution as well however this years decline is more drastic and longer lasting 
    • So… all this being said, pollution has begun increasing again in the last week indicating that the Chinese are getting back to work therefore giving a positive spin to the markets as they feel like their economic activities will pick up as manufacturers get back to work, optimisim spilling over to commodities, particularly beans