Image Source: Unsplash
 

We kickoff the day with Redbook YoY at 7:55 A.M., RCM/TIPP Economic Optimism Index at 9:00 A.M., Total Household Debt at 10:00 A.M., Fed Mester Speech at 11:00 A.M., Fed Kashkari Speech and 3-Year Note Auction at 12:00 P.M., Fed Collins Speech at 1:00 P.M., and API Energy Stocks at 3:30 P.M.

While food prices in the US continue to advance, The Food and Agriculture Organization of the United Nations reported that global food prices continued to decline in January. The global Food Price Index was down 1.6% from December and was 10% less than a year ago, marking the 15^th consecutive month of year-over-year declines. The cereals index marked the largest drop of 17%, oils were down 15%, and the dairy index was down 14%. The meat index was down just 1%, while the sugar the sugar index was up 15%. January marked the 14^th consecutive month of year-over-year gains for the sugar index. However, the index has dropped 18% from its October high.

South American weather forecast has Argentine rain beginning late Thursday with Northern Brazilian Monsoon performing normally. Argentina will endure dryness and incredible heat that will end later in the week. Some measure of corn and soybean yield loss is inevitable but worse-case scenarios will be avoided as soaking rain returns in the 6-10 day period and as temperatures moderate beginning on the weekend. The EU and GFS models are in broad agreement that rainfall of 1-2 +” blankets the core of Argentina’s ag belt Feb 8-12. Another three days of excessive heat occurs before temps moderate, but hold at above normal levels. The GFS has projected an 8-day change in soil moisture. Better rain is desired in RGDS in Southern Brazil, but elsewhere enough rain falls to sustain or boost moisture reserves. There’s no sign yet that Brazil’s monsoon season ends early, but this will be the focus of weather watchers during March and April. The long range forecast models call for an early monsoon withdrawal. The grains are trying to build on yesterday’s rally with short covering expected into the CONAB/USDA reports on Thursday, with no expected new selling until post the key reports.

The best recovery in Chinese stock values occurred in over a year amid the hope for additional economic stimulus post the Lunar New Year holiday offered support and comments from the Chinese government that it would guide institutional investors to enter the market with greater effort. Several major hedge funds report that Chinese government has restricted selling from them. China’s stocks surged 3% with the Hong Kong market up 4%. Macroeconomic trading firms are trying to gauge whether China’s government actions can create a bottom in consumer psychology and an increase in consumption. World commodity markets have endured selling on the economic gloom surrounding China since their past pandemic opening a year ago.

More By This Author: