The fact grain futures were trading on fundamentals like crop projections is significant during this week of uncertainty. It's also noteworthy that one of the nation's, indeed the world's, first responses to the terrorist attack was issued from the marketplace.
In Europe, many traders who had taken short positions against the dollar prior to Tuesday's attack and who would have subsequently benefited financially from the tragedy entered the market on Wednesday to return their profits. The ethos that defines western market culture is not confined to the concept of business as usual. Many European traders felt it improper to benefit from terrorism and took steps to prop up the dollar on Wednesday. Sometimes "making a market" is a political statement not just a commercial act.
Just as true was the quiet movement of livestock and grain from Rural America. Terminal and processing activity was virtually unimpeded by the disaster in New York. And as we reported a moment ago, by week's end the open outcry of futures exchanges had found a voice.
Commodities exchanges reopened Thursday after an historic two-day shutdown in the wake of the terrorist attacks on the center of the American political and financial system. While futures prices are expected to move temporarily lower to cover hedges NOT made during the markets' shutdown, most eyes were on the bond and currency pits as the trade tried to gauge investor sentiment. Those markets on Thursday closed encouragingly. The treasuries were down fractionally and the dollar was higher against the Euro.
The broad question facing the market is whether investor hesitancy and consumer reluctance will lead to a further slowdown in the economy. Some analysts say that if consumption of meat and vegetable oils drops, it could impact long-term demand for grains.
Meanwhile, the physical movement of grain was largely uninterrupted. Major river terminals remained in operation and the U.S. Deputy Trade Representative said the attacks on the U.S. should have only a short-term affect on trade.
On the livestock side, meatpackers reported business as usual throughout the week. And though the Mercantile Exchange was closed for two days, cash markets actually did some limited midweek trading. As with grains, the meat trade will be closely watching consumer demand in the weeks ahead.