JAN 12. INFLATIONS, THE HIGHEST IN 40 YEARS.
[01/12] US CPI had been up 7.0% in last 12 months period. That’s the highest rate in 40 years. Last June in 1982 was the last time recorded this much high. USD hit the lowest rate in 2 years period because of this. USD Index fell 0.67% today, ended at 94.986, sunk under 95 points. Today’s CPI report reinforced the theme for FED to fight back inflations, tapering its bond buying programs and raising the interest rate. FED will be in action as soon as in Mar. Investors and market are supplying enough trust to FED recently. As consequences, US equity market up again. DJ up 0.02%, S&P up 0.26% and NASDAQ up 0.39% but still in much thinner trade volume than usual. Crude oil market rallied again. Up another 0.96% today, ended at $84.52 per barrel. JP Morgan estimated crude oil price in 2022, could rally up to $125 per barrel due to demand recovery. Other private company estimated that crude oil price could go up to $100 in this first quarter because, some OPEC members don’t have enough abilities to maintain its oil production levels due to COVID-19. One thing is clear in this week’s market movement, as mentioned yesterday, DE-COUPLING FROM PANDEMICS. The theme of the week! In Ag market, It was USDA day but not much excitement this time. Mostly inside of expectations. USDA increased US production for corn and beans from last report with a bit of better yield or little bit of more harvest areas which were not surprising at all. Internationally, USDA lowered Brazilian’s and Argentine’s bean and corn numbers as expected. The question was that how much USDA would decrease this time. USDA lowered 3M MT of Brazilian corn to 115M MT and lowered 5M MT of soybeans to 139M MT. Well, USDA added the reality in their reports this time. That’s why today’s Ag market have not moved dramatically. Chicago soybeans up 0.92% and meals up 0.75% but corn actually fell 0.33%. USDA’s concrete update of SA numbers gave the market to breathe a little bit of rooms to re-balance their positions. During the day, soybean and meals were downed 0.50% ranges but quickly changed the direction with Chinese movements of covering their opened positions. Chinese bought another 2 more US soybean new crop cargos last night. Wheat market downed comparatively today. Fell 0.8~1.6% ranges. Today’s fall was based on TOO MUCH wheat around the world. USDA reported Australian wheat new crops as 34M MT today. That’s about 4M MT less than other’s estimation. Heavy competition will be continued between Australian, Russians and Ukraine in wheat export market. So, USDA WASDE Jan report finally came out but no surprising this time but clearly shows the direction of the market in 2022. It’ll be gone up more.