Markets Roil in the Overnight; Reaction to the Election

Markets roiled overnight in reaction to Trump’s election but by early morning some of the market capitulation had waned. At one point, S&P futures were off 6%, the USD off 2.3% and soybeans fell as much as 17 cents before climbing back to more tempered losses heading into the morning trade.

Turning to ag news, today brings fresh crop data from USDA. Traders look for a bump in US soy production and carry-out while corn is expected to see steady to lower carry-out on a slightly production decline. Baring some big production figures from USDA the trend seems to be building toward bullish in grains as demand remains robust and big production figures are factored in.

In international news, the Mexican peso has had the biggest fallout from the Trump victory as the currency is currently off 8% against the USD, although at one point it was off as much as 12% overnight. This potentially poses problems for US corn demand as Mexico has been a major buyer in recent months. So far year-to-date export sales to Mexico have totaled 7.1 MMT (or 28% of total US sales) versus last year at this time of 5.3 MMT. Is this at risk now?

Weather shows rains for the next two weeks for about two-third’s of Brazil which is positive for crop conditions, while soggy parts of southern Argentina are expected to dry out in the coming weeks.

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 0307930)

—Kevin McNew