Good morning,
All markets are lower this morning with corn down 6, soybeans down 15 and wheat down 14.
Economic changes developing in Argentina have brought the market lower overnight. A devaluation of currency and a cut in government spending are making the headlines this morning. Argentina wants to take the taxes off of Agricultural goods, their number one supply of government income. Argentina is currently in bankruptcy with the IMF and owes 44 billion dollars regardless of what they want to do policy wise. They’ll have to come up with the money or default on the default!
The grain industry in Argentina was expected to meet with Argentina’s new administration late Tuesday after the new fiscal measures are announced. Announcements were expected around 2 pm Central on Tuesday but came out later in the day. Argentina is battling triple digit inflation as well as foreign currency reserves estimated at a negative $10 billion. Argentine Economy Minister Luis Caputo announced the Argentine Peso would be weakened to 800 per dollar from 365 now. He also said the government would reduce energy and transport subsidies but double the social spending on the poorest people. The poverty rate in Argentina is currently above 40%.
The weather in Brazil is currently hot and dry. The short-term forecast has the hot air mass extending out into the 11–15-day period. The 10-day forecast has plenty of rain for Southern Brazil and Argentina, where temps are normal. Northern Brazil is hot with temps in the 90’s to 100’s and rains have been hard to come by. The 11-15 day forecast still shows a return to rain.
Have a Safe Day!
Garry Gard
920-348-6844
