Stock indices and futures for agricultural products rose sharply against the background of the agreement on changing the US national debt limit

US President Joe Biden announced that he agreed with the speaker of the House of Representatives of the US Congress to change the level of the country’s national debt, which will avoid default. The US president called the deal an important step that will reduce spending, protect critical programs for workers and boost the economy.

“The deal is a compromise, so not everyone will get what they want. But this is the responsibility of management. Such an agreement will be good news for Americans because it will avoid a catastrophic default and economic downturn, the loss of millions of jobs and the emptying of retirement accounts,” Biden added.

Initially, the deadline for changing the US national debt limit was June 1, but then, according to Finance Minister Janet Yelena, it was moved to June 5. This increased the pessimism of the financial and commodity markets and led to a decrease in quotations.

But stock indexes rose slightly on Friday, with the S&P 500 up 1.3%, the Dow Jones Industrials up 1% and the Nasdaq 100 up 2.58% to a 13.5-month high on rumors that the negotiators were approaching before agreeing to raise the US national debt limit and limit federal spending for two years.

Better-than-expected reports on the US economy supported the prospect of the Fed raising the key rate in June by another 25 basis points to 5.25-5.5%.

Also, the price of futures for agricultural products rose significantly on Friday. The main reason remains speculative factors due to forecasts of dry and hot weather in the US corn belt in the next two weeks.

On the Chicago Stock Exchange on Friday, December corn futures rose 3.6% to $210.4/t, November soybean futures rose 1.5% to $437.1/t, and July wheat futures – by 1.9% to $226.3/t.

Financial traders increased their net short and long positions in corn, soybeans and wheat during the week, according to CME’s weekly CFTC report.

Quotes will continue to rise this week, supported by speculators and unfavorable weather for soybeans and corn in the US.

Tags: prices