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Senior Contributor

OptionEye - Macro Outlook - Aug 25th

Good morning. 

 

Overnight China crashes again but the US markets seem to have shrugged off the down move. 

 

Corn is up 5, beans are up 9 and wheat is up 7. All have gained ground this morning adding on a few cents to their rallies. 

 

Stocks are sharply higher this morning witht the S & P futures pointing to a whopping 62 point opening. Don't get sucked in. This is definitely not over. I would rather be a seller on rallies than a buyer on dips. China is a much bigger deal than the media want you to believe. 

 

The 10 year yield back over 2.00% this morning and stands at 2.07%. 

 

Oil is up .98 to $39.22 and still finding it hard to find its feet. Gold is lower by $6.18 to $1148.93.

 

The dollar is stronger this morning at 94.00 up .67.

 

Today we get a lot of housing numbers, Markit US PMI's and the Consumer Confidence Index. 

 

Hang on tight. 

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10 Replies
Advisor

Re: Overseas sales out of Germany are UP 2.2% for

the last 3 months: That is pretty positive Global news. Germany is the Globe's leading exporter ( runs neck and neck with china ). matter of fact a huge bunch of German exports go to china. i figure the chinese correction is in now. keep in mind stocks there were loosened up for private ownership bout a year ago... sooo average stocks there went up from 140% to 220% over the past year. things ( stocks ) there is back to the pre boom levels of exactly 1 year ago now.
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Senior Advisor

Re: OptionEye - Macro Outlook - Aug 25th

Care to elaborate on why China is a much bigger deal?
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Honored Advisor

Re: OptionEye - Macro Outlook - Aug 25th

Great question MT...

 

The "manipulated" market of China may go down as long as it is influencing other world markets ???   Is it not a "controlled" market??

 

 Just a thought

 

So I agree with your question.  Someone should expound on why it is a big deal..

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Veteran Contributor

Re: OptionEye - Macro Outlook - Aug 25th

First and foremost it is a big deal because they take 1 out of every 3 bushels of soybeans that we produce.   Last year they took 30% of all the DDG we produced.   Last year they took 60% of all the milo we produced.   They take half of all the soybeans that South America produces.   They imported 10MMT of barley last year forcing Saudia Arabia to buy corn from us.  

 

When they cough USA demand catches a cold.

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Advisor

Re: OptionEye - Macro Outlook - Aug 25th

Kstate--and China plays the markets here like a fiddle. Higher prices lead to cancellations. Trump is right on this one--our country is being outsmarted by these shysters.
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Veteran Advisor

US Soybean Exports (March 2015 bar chart)

fdd03272015_fig1.jpg

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Honored Advisor

Re: US Soybean Exports (March 2015 bar chart)

This will never happen...but....Just cut the availability of U.S. grains to China and have China's ability to feed their people get disrupted.   The "playing us like a fiddle" stuff would come to an end.  It would be interesting to see who would blink first.  

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Veteran Contributor

Re: US Soybean Exports (March 2015 bar chart)

The greatest benefit of the trade with China might be that we both depend on each other.   Hard to start a war with someone you depend on--from both sides.

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Senior Advisor

Re: OptionEye - Macro Outlook - Aug 25th

So try this one on for size

A large chunk of China got the taste of meat and feel of an iPhone. Yeah it might slow but it's going to be hard to go back to rice and a big chief tablet.

And someone in the world is going to make the throw away junk we seem to crave. And that someone might just increase their standard of living

So overall the boat rises even if China isn't the tide

Things ebb and flow. But the overall tide has and will rise

More people. More junk. More demand for commodities.
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