In today’s update:
Top Five:
New highs in palm
A retreating Brazilian real
Friendly bean oil fundamentals
Corn is king again
We love winning by default
Headline(s) of the Week:
Deere under FTC investigation over farms’ right to repair equipment
Carbon Pipeline Law Faces SD Vote
Mississippi River Dries Up Again at Worst Time for US Farmers
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This Week’s Top Five
Propitious Palm
Palm continues to be a driver in world veg oil markets, up the first four days of last week to new highs on Thursday before falling 1.1% on Friday to RM4,584 per tonne, a 7.3% gain on the week.
Year-to-date, nearby palm oil futures have rallied 23% but when factoring in the Ringgit’s 6% appreciation versus the US dollar since January, nearby palm oil is up 30% on the year compared with an 8% loss for soybean oil during that same time.
Recent gains have widened palm oil’s premium over soybean oil, holding near $100 this week.
Currencies matter!
A Retreating Real
Speaking of currencies, the US Dollar Index continues its run, closing higher 16 of the last 20 trading days, advancing to three-month highs near 104.50.
This has left the Brazilian real near its weakest since late-July and within spitting distance of its 2020 all-time lows versus the dollar.
Why does it matter?
The real’s weakness versus the dollar has benefitted the Brazilian producer considerably as CBOT soybean futures in BRL remain 65% higher than they were at the beginning of 2019, compared with a mere 7% increase in dollar terms.
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