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The US Fed said it will soon be appropriate to raise rates and hinted at a hike as early as March. The DXY dollar index hit an 18-month high above 97, weighing on dollar-denominated commodities, and US steel and lumber prices fell.
A stronger dollar and higher rates make USD-priced commodities more expensive for foreign buyers, a bearish pressure on feed grains and other commodities. Analysts expect the dollar to rise further this year.
capitaleconomics.comLuke Nickels, Kieran Tompkins, Kieran Clancy, Edward Gardner, Commodities TeamJan 28, 2022After 2,356 past bullish macro events, US Dollar (Broad) moved a median +0.2% over 5 sessions (60% higher; middle half -0.3% to +0.7%), and +0.4% over 20.
After 301 past bearish macro events, Corn moved a median -0.1% over 5 sessions (47% higher; middle half -2.2% to +1.3%), and +0.2% over 20.
After 273 past bearish macro events, Soybeans moved a median -0.4% over 5 sessions (44% higher; middle half -2.4% to +1.4%), and -0.5% over 20.
After 69 past bearish macro events, Wheat (SRW) moved a median -0.5% over 5 sessions (35% higher; middle half -2.6% to +0.8%), and -0.7% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
