BQC Morning Comments Sept 3.24

Geopolitics:

Six hostages were killed by Hamas over the weekend. Joe Biden and Kamala Harris spent some time in the situation room in order to discuss progressing the ceasefire deal, but is it too late? One of the murdered hostages was an Israeli-American and Hamas said they will keep killing until a deal they like is signed. Israel’s President Netanyahu says Israel will strongly respond to this act of violence saying, “We’re going to exact a heavy price from Hamas”. Biden is blaming Netanyahu for not being able to secure a deal to free hostages and Netanyahu is blaming Biden for not being threatening enough. There were thousands protesting in Israel for the second day in a row yesterday upset by the news. The president of the United States is back to the drawing board after a two week vacation in Delaware and California.

Macroeconomics:

China is hitting Canada with an anti-dumping probe on canola imports. This comes in response to Canada imposing 100% tariffs on China electric vehicles and a 25% tariff on imported aluminum from China. Most are saying this could be another “head-fake” that China likes to do to drop the prices of canola before preparing to make a purchase. More than 50% of canola produced in Canada is sold to China.

Ag Fundamentals:

Harvest has begun in the mid-south including parts of Mississippi, Arkansas, and Tennessee. The river locations the originate a large portion of the production in those states are watching the gauge very closely. This is the third year in a row that low river levels have caused problems for producers in this region. Brazil is currently experiencing one of its worst droughts in recent years. The monsoon season starts in late September and early October so they may have some relief soon. Soybean prices could be up this morning due to both news of dryness in Brazil and China threatening Canada with an anti-dumping probe.

Weather:

Mostly clear over the holiday weekend. The lower Mississippi River is low and needs another 2-3 feet to return barge drafts to maximum. Brazil is dry and there are thousands of wildfires that have scorched parts of the Amazon. The Brazilian government has suspicions that the fires are not all started naturally, claiming that there may be criminal activity promoting the fires. This may be a deflection from their environmental programs coming up short while trying to prevent wildfires in a drier than expected year.