Highlights
On Wednesday, a giddy euphoria about the US economy prevailed on the “certain” prospects for lower interest rates in September. Thursday morning, the U.S. jobs data showed 114,000 jobs were added in July; the market expected 176,000. Worse yet, the June new jobs number was revised lower from 206,000 to 179,000 and the unemployment rate jumped to 4.3%, up 0.2%. That was the largest one month increase in many years. Suddenly, the giddy euphoria turned to gloom and doom that a recession was at hand. Huge losses in the stock market and the expectation for lower energy demand sent crude sharply lower also.
Now there is talk that the Fed may reduce interest rates before September and the reduction may be as much as a half percent. That is why the dollar index is literally falling out of bed, making U.S. products cheaper for foreign buyers. An added benefit is the Brazilian currency is gaining on the dollar, making Brazilian corn, beans, beef, pork, and chicken more expensive for foreign buyers.
Eduardo Vanin reports the corn and bean basis at the ports in Brazil are firming to compete with the domestic poultry and hog demand. Feeding margins are at their best in over four years.