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Friday's USDA Report continues to loom. Technical moving averages and wedges are coming into play today and probably tomorrow, as computers trade the path of least resistance until we have data to trade. Today saw some discussion on whether in South America with the potential for Argentina to see some rain. Until this actually comes to fruition, it will be difficult to pull the attention away from Friday.
In other South American news, a Brazilian farmer group reported the start of soybean harvest in #1 production state Mato Grosso, after planting delays this season pushed back the crop; that compares to 6.5% progress by January 12 of last year. This is not the bulk of harvest, which is expected to hit towards the end of the month, but an indicator that soybean exports especially are likely to continue to drop in the coming weeks.
The trade predicts USDA on Friday will reduce U.S. corn ending stocks for a SEVENTH consecutive month (longest such streak in at least 20 years). A slightly smaller corn crop and continued strong demand support that expectation. Supplies of soybeans are seen remaining ample. Analysts see U.S. winter wheat acres for the 2025 harvest nearly identical to 2024.
Today's Trump headline comes from a CNN report that Trump is reportedly considering declaring a national economic emergency in order to provide the legal justification to push through his tariff plans via the International Economic Emergency Powers Act. In just three days this week, we’ve seen reports of the Trump administration potentially softening their tariff plans, the next day denying said softening, and the following day potentially considering a more extreme measure to implement them... At the end of the day, we don’t know what the plan will actually look like until it happens. What this means for inflation is a side-effect that we may see spillover into the commodities markets as well. Commodities have been known to be a "safe-haven" for money flow with higher volumes during times of inflation (money managers using commodities as a hedge against inflation). Is this a silver lining?
The CME will close at 1:15 ET tomorrow to honor the late-President Carter.
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