For one brief shining moment, the best two-way baseball player in generations and most sought-after free agent this offseason, Shohei Ohtani, was definitely coming to play in Canada for the Toronto Blue Jays.
All the signs were there: a private jet was flying from Los Angeles to Toronto; an upscale sushi restaurant was booked for 50 people; and Drake posted a photo wearing an Ohtani all-star jersey. Coupled with just enough “unnamed sources close to the situation,” Ohtani as a Blue Jay was a done deal.
Until it wasn’t.
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In the end, Ohtani never even left L.A. Instead, the Japanese star will be moving his talents for striking out batters and hitting homeruns a few miles down the L.A. freeway, from the Angels to the Dodgers, after signing a 10-year deal with the latter worth US$700 million.
The Ohtani saga is a good reminder of how the grain and oilseed markets can also find themselves caught up in hype at times, with all signs pointing one way – until they aren’t. Or until it comes out that there were never any real signs in the first place.
Weather news: Forecasts out of Brazil and Argentina are major market drivers at this time of year, as traders try to get a sense of production prospects for the developing soybean and corn crops in South America.
Many forecasters have been slowly lowering their calls on Brazilian soybean production due to dryness in parts of the country and excessive moisture in others. At face value, this should be supportive to prices, but the underlying truth is that Brazil will likely still grow a near record large soybean crop, while Argentina is in much better shape than it was a year ago.
Economic news: This can be a big culprit leading to erratic price moves. On Dec. 13, the United States Federal Reserve left its key interest rate unchanged for the third time in a row and hinted that as many as three rate cuts could be coming in 2024. Only a few days earlier, fed chair Jerome Powell implied more rate hikes were possible, resulting in a bit of whiplash in currency and financial markets.
Weakness in the U.S. dollar supported agricultural futures there, but a sharp rise in the Canadian dollar had the opposite effect on domestic prices, contributing to losses in canola futures and local wheat bids.
World news: Many times, events around the world with little outright connection to the grain trade can have an outsized influence on the agricultural markets. The war in Ukraine was initially incredibly supportive for wheat futures, sending prices to record highs in February 2022.
However, nearly two years into the conflict, grain is still moving out of the region (albeit to a lesser extent) and news from the Black Sea region is only one influence of many driving the wheat market.
Sometimes it’s true that “where there’s smoke, there’s fire,” but it’s also good to remember that sometimes the private jet flying across the continent may only be carrying one of the investors from Dragons Den and not the most sought-after baseball player in the world.
