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Soybean Oil
A Number of Big-Picture Headwinds Continue to Threaten the Global Economy
Over the past month the markets have been presented with fears of a nuclear attack, a US or Japanese attack on North Korea, more Washington gridlock and one of the worst natural disasters in US history, and yet some equity measures are starting September at all-time highs!
Disappointing US Activity, Slide in Commodities
In retrospect, the recent sharp declines in equity prices and significant pressure on industrial commodities were justified by disappointing US scheduled data and the Fed’s move to notch interest rates upward.
The Progression Away From Deflation Has Begun
Several weeks ago we spoke of a brightening of economic skies, but in this publication, we have to note some short-term vulnerability potential in markets that are overbought and/or markets that might be overly sensitive to a shift by the Fed back toward a more hawkish stance at upcoming FOMC meetings.
Commodities Should See Fewer Negative Outside Influences
After a slight brightening of the skies, the US Fed has stepped in and stoked recovery efforts further with a reduction in the number of anticipated 2016 rate hikes and a nod to the importance of international headwinds in their future policy decisions.
The Pace of Improvement Remains Difficult to Detect
The brightening of the economic skies continues, but the pace of improvement remains difficult to detect.
Large Grain Supply May Not Be Enough!
Several years ago, the amount of food consumed inside the home was surpassed by what was consumed outside of the home.
Sentiment Was Overly Negative Going into the 2016 Equity Market Lows
Last week we suggested that the “long dark shadow” of deflation was starting to fade, and given the impressive rally off the February low through the end of the month, we would suggest that sentiment was overly negative going into the 2016 equity market lows, as the global swoon was mostly about disappointing forward momentum and not some major, difficult-to-solve obstacle.
The Deflationary Selling Binge in Commodities Has Continued with a Vengeance
The deflationary selling binge in commodities has continued with a vengeance, with sagging crude oil prices leading the way.
Additional Commodity Pressure in Anticipation of an Interest Rate Hike
In looking ahead to the coming week, we expect additional commodity pressure going into the FOMC meeting off of a stronger dollar in anticipation of an interest rate hike.