Dovish Fed: Ag Borrowing Costs to DROP

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🏦📉 Market Update - Fed Rate Decision, PPI Data, South American Weather, Argentina Export Taxes, Ethanol Production, and More 🇺🇸🌽🌦️

🏦 Fed Rate Decision - Rates Held Steady:
The Federal Reserve announced its decision to keep interest rates unchanged on Wednesday. It also signaled at least three rate cuts in 2024, totaling 0.75%. The markets are anticipating more significant rate cuts, with expectations of a 1.5% reduction next year. Following the announcement, stock markets, including the Dow Jones, S&P 500, and Nasdaq, gained 1.4%, with the Dow Jones surpassing 37,000 for the first time.

📊 November PPI Data:
The November Producer Price Index (PPI) revealed that the economy is still cooling. Wholesale prices remained unchanged on a monthly basis, up from a 0.4% decline in October. On an annual basis, prices increased by 0.9%, down from 1.2% in October and lower than the projected 1%. The report has fueled optimism that inflation will continue to decline, supporting expectations of Federal Reserve interest rate reductions in 2024.

🌦️ South American Weather Update:
Most Brazilian soybean areas are expected to remain dry for the next 5–6 days, benefiting production in southern areas but posing challenges for central and northern regions. Rainfall is forecast to return next week, with spotty coverage and variable amounts. Rainfall remains below normal seasonal levels.

🇦🇷 Argentina Export Taxes Proposal:
Argentina's new president, Javier Milei, has proposed an increase in export taxes on certain grains to 15%, excluding soy. Soybean exports are currently taxed at 33%, while wheat and corn exports are taxed at 12%. This proposal follows Argentina's recent currency devaluation and spending cuts.

🍃 US Ethanol Production:
US ethanol production declined slightly last week, with weekly output at 1.07 million barrels. Ethanol stocks increased to 22.1 million barrels, up 3.1% compared to the previous week but down 5% YoY. Implied gasoline demand saw a 4.6% increase compared to the previous week and 6% YoY.

🌱🚢 USDA Reports Flash Sale of Soybeans:
US exporters reported a flash sale of 125,000 metric tons (5 million bushels) of soybeans to unknown destinations for delivery during the current marketing year. The US soybean export book continues to lag behind last year, with a 16% deficit for the same period.

Stay tuned for more market developments and insights! #FedRateDecision #PPIData #SouthAmericanWeather #ArgentinaExportTaxes #EthanolProduction 🌐📊🌽🏦