Written Commentary
MORNING COMMENTS
Geopolitics:
President Joe Biden and the EPA finalized a new tax on Tuesday on methane emissions from the oil and gas sector. $900 per metric ton of methane emitted in 2024, increased to $1,200 per MT in 2025 and $1,500 per MT in 2026. The EPA stated they plan to increase this tax every year following indefinitely.
Macroeconomics:
The US Dollar has been on a tear higher since late September when inflation reports were getting better. The Fed cut rates 50 basis points on September 18th, higher than expected and the dollar found the floor. If the Fed decides to hold off on cutting 25 basis points on December 18th then the dollar may rally higher to 115.00. This would be bearish commodities. From a global perspective, the United States looks like the best investment for the next decade and currencies are moving into the USD. “We are the best looking house on an ugly block”.
Ag Fundamentals:
Export sales will be released tomorrow due to the holiday moving reports back. EIA energy stocks and usage is out later today. Ethanol numbers may be weaker than the week prior. Hard to imagine ethanol margins have been able to sustain usage at a higher pace than last week’s reported 1.105 million barrels per day production. Crude oil slightly higher this mornings, but still $4 lower than the monthly high. The Dollar is putting pressure on commodities and will continue to do so as it rallies higher. The Fed cutting rates or not next month will become increasingly important. Does anyone remember the 1980s when the dollar index reach levels above 160.00?
US Dollar Index nearing 107 points overnight with a high of 106.99. The Chart below has support just above 100.00 and resistance at 114.50 to 115.00.
US Dollar Index all time chart shows just how high this thing can go.. 160.00 in February of 1985 and 120.00 in January of 2002.
Export & World News
Malaysian palm oil futures were down 23 ringgit, at 4964.
Daily Trading Limits: Corn $0.30 (expanded $0.45); Soybeans $0.85 (expanded $1.30); Minneapolis Wheat $0.60 (expanded $0.90); KC Wheat $0.40 (expanded $0.60); Chicago Wheat $0.40 (expanded $0.60)
>>Interested in more commentary by Joe Mauck? Go HERE
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