08/16/24 Afternoon CommStock Report – Why Care About the Yen Carry Trade?

Friday arrived to test whether U.S. stocks would hold on to their best performing week of the year. The rally follows the sharp plunge for stock prices at the start of the month, which had been felt clearly in the grains and livestock. After the major equity indexes recovered most of their recent losses, grain futures gave up what had been a brief source of support from capital rotation and spread unwinding with the weaker outside markets. Cattle futures have rebounded to retrace some of the large selloff that occurred over the first three days of August, but concern over the health of the economy remains heightened.   This latest mini financial market panic was wide-reaching in its influences for the agricultural commodities. Japan faced the worst stock market fallout as monetary policy action there was a partial trigger for the episode. Other of our largest ag trade partners were also affected, notably in their currencies. Exchange rates adjusted considerably for U.S. export customers including China and Mexico, as well as for competitors such as Brazil and Argentina. While the stock markets mostly made a quick recovery, there may have been a lasting shift for currencies and the global terms…