BQC Morning Comments Sept 24.24

MORNING COMMENTS

Geopolitics:

President Joe Biden will give a speech today to the United Nations General Assembly later today in New York. The last one of his presidency. A lot of times this is used as a victory lap to present to the world all the accomplishments their administration has achieved. With all the geopolitical unrest, that lap may be a quick one. War between Israel and terrorists in Lebanon, Sudan’s civil war, and the Russian/Ukraine war are all concerns that he may address as well. He may use the stage to mention the state of the economy and inflation, but ii will probably be spun to look like a successful soft landing based on the Fed cutting rates and the labor market looking stable according to recent government reports.  

Macroeconomics:

Former President Trump spoke to farmers in Smithton, Pennsylvania yesterday. His comment that stuck out the most was threats of 200% tariffs on anything John Deere (or any other manufacturing company) imports if they continue to build products outside of the US. This would be a good way to keep jobs in the country boosting economics around areas those company decide to build if they do stay within the US. This is long term thinking in a country that changes leadership often. In the short term prices of John Deere products could increase with imposed tariffs. It is a very “America First” stance, but I wonder how it will resonate with some of his supporters who are at risk of John Deere products getting more expensive.

Ag Fundamentals:

Brazil’s Central regions took some precipitation out of their 30-day forecast.They still have time for rain to reappear in those areas before the market starts to trade a late planted crop. 80% of the crop is planted in October. Their concerns now would be like us worried about early planted April beans getting in a little later. I think Brazil gets the crop planted either way. There is an old saying.. “plant in the dust, and your bins will bust”. This situation effects spreads more than anything because it is more about planting timing effecting harvest timing and China then needing to buy US exports while they wait for Brazil’s crop to come off. If Brazil starts to show signs of a good start to the growing season between now and February, farmers will look back and wish they sold this bean rally.       

Weather:

Potential tropical cyclone “Nine” soon to be known as “Helene” is projected to make its way up the Gulf of Mexico and hit land  just east of Panama City Beach between tomorrow evening and Thursday morning. Forecasts projecting the storms strength range from a tropical storm to a category 3 hurricane. Some storm tracks suggest Helene will curve to the west as it passes Tennessee, which would allow for proper rain to hit the Ohio River Valley. The Lower Mississippi needs more than just 4 inches of rain to recover from it’s low water situation.