Market Outlook for US and South America Regions
After the February USDA report, soybean and wheat futures were rangebound. May soybeans traded between 13.50 and 14.00 and May Chicago wheat between 6.40 and 6.60. May corn had a wild ride from a high near 5.72 to a low near 5.23 and is now back near 5.50.
January 2021 was good for the producer and good for speculative traders, especially traders with spreads. April 2021 lean hogs on December 31 settled at $72.25/cwt and on January 29th closed the day at $76.65/cwt.
With the December 2020 holiday beef demand over, boxed beef prices began the first week of January 2021 moving lower. Overfed big cattle in the Midwest and Northern U.S. were a problem in the last quarter of 2020 and continued to be a problem starting out in 2021.
Stock Index Futures
S&P 500, Dow and NASDAQ futures advanced to new record highs due to vaccine and fiscal stimulus optimism, along with better than expected quarterly earnings results. In addition, recent gains were linked to ideas that the Federal Reserve will remain accommodative for an extended period
US Dollar Index
The U.S dollar index appears to have found support near the 90.000 level. More recently the greenback has firmed, as some economic reports came in better than expected.
The euro currency made a near-term top in early January and has trended lower more recently. Economic news has been mixed.
Crude oil futures extended gains with both WTI and Brent crude near 13-month highs amid weather-related supply disruptions and a larger-than-predicted decline in U.S. crude oil inventories.
Flight to quality longs in gold continue to be liquidated in light of a stabilizing U.S. dollar. Gold futures are seeing only limited support from increasing prospects of rising inflation levels.
Market Outlook for China and Asia Regions
The key Chinese and Asian event over the last 30 days has been China’s PPI record growth, although the CPI dropped temporally in January. Traders believe an increasing PPI will translate to higher inflation down the road. Australia kept its key interest rate unchanged, but surprised the market by expanding the QE size.
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