We learned a long time ago politicians are far more unpredictable than the weather. Overnight was another classic example.
Indonesia announced Friday a two month ban on palm oil exports. We made the comment Saturday that it was amazing soybeans were down Friday with about half of the world's palm oil exports being shut off for two months.
Palm oil traded more than 4 cents a pound (huge) higher last night and beans traded 7 cents higher before weakening, which at the time made no sense at all.
Indonesia "clarified" the export ban today. The ban only applies to refined palm oil products.
We mentioned Saturday that Indonesia produces about 28 million mt of palm oil a year, but only consumes about 16 million mt. We predicted the export ban would be short lived, but we did expect the ban to last more than 24 hours.
Before you panic sell beans, suppose that the announcement on Friday had been Indonesia had banned the export of all refined palm oil products for two months.
Would that have been bullish or bearish?
So beans are sharply lower because the ban was changed to not include crude palm oil, but the news is still friendly the vegetable oil market and, therefore, the bean market.
Corn also took a dive but has come back nicely and the beans will also, if not today, layer this week.
i am thinking the Tech Guy would agree that, while this is a deeper correction than we seen for awhile, the market is restoring its "energy" for the next push to contract highs.
Nebraska is burning as you read this and has been off and on for three weeks. Most of Nebraska's crop area have received less than 2 inches rain the past four months. They are running the irrigation pivots now, not to water a crop, but to keep the soil from blowing away.
Much of the Dakotas got another 10 to 20 inches of snow last night.
The second crop corn in Brazil is hurting for water and the US soybean export book has more new crop beans than ever before this time of year because Brazil's bean crop is down 20 to 25 million mt.
The National Weather Service updated their ENSO information this morning. Take a look at the water temperature chart: