Bill Moore
About The Author

Bill Moore

William Moore's market views are centered around his many relationships with Agricultural producers. His weekly newsletter, AGMASTER, provides a blend of fundamental & technical information used to make prudent hedging decisions. Contact Mr. Moore at (312) 264-4337

MAR SOYBEANS

Mar Beans were able to squeeze out a 10 cent inter-week advance – only to surrender that & much more – as Friday exports were abysmal – at a marketing year low! The mkt could see some evening up this week in front of the USDA’s final Prod & Yield #’s- issued on Thur 1-12-17!

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FACTORS IMPACTING THE MKT

  • EXPORTS – Mon Inspections were 1,457, 230 MMT (1.1-1.4) – Fri sales were an abysmal 87,000 (500-1.5) – due to a last minute cancellation
  • JAN USDA FINAL #’S – 1/12 – the USDA is looking for the following

Est Prod –       4.374 BB

Yield                 52.7 B/A

End Stocks     .468 BB

Qtly Stocks     2.935 BB

  • SOUTH AMERICA- too dry – then too much rain in Argentina – a little dry in Northern Brazil – the mkt is too cheap to tolerate much in the way of weather issues in the Southern Hemisphere
  • US DOLLAR – coming off a 14 year high, the mkt has shown some topping actions – it wouldn’t be surprising from these levels
  • TAX SELLING – after the first, a little bit of rally could result in some opening of the producer’s bins

The first week of 2017 gave us the lowest weekly close since Mid-Novat 995 – 75 cents off the Dec Highs & 45 cents off the Oct lows. Going forward, South American weather will trump all – including exports, the US Dollar & the price of crude!

MAR CORN

On the back of an expectation for sharply reduced corn acreage in 2017 & a perception that much of the bearish supply news is dialed in, Mar Corn closed higher 5 days in a row – moving from the lower to upper end of its recent range (342 – 364)! While beans lost a dime, Mar Corn picked up 6 cents with a big assist from wheat – a 15 cent winner for the week!

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FACTORS IMPACTING THE MKT

  • EXPORTS – Mon Inspections were 876,562 MT (400-800) – Fri Sales were 429,000MT (550-1050)

112,500 MT to Unknown

  • THUR USDA REPORTS – final #’s shouldn’t be any surprise but will remind the trade of the big carry-out!

Est Prod –   15,196 BB

Yield               175.1 B/A

End Stocks     2.385 BB

Qtly Stocks – 12,300 BB

  • FARMER SELLING – off this week’s rally, some producers are opening their bins creating some cash flow for Spring Planting Expense
  • A BIG ACREAGE REDUCTION – Informa predicted a 4-5 million acre decrease from 2016 – as the Bean/Corn ratio is the highest in 20 years
  • SOUTH AMERICA – if things aren’t just right, corn prices are too cheap to stay at their current 7-8 year low levels
  • OUTSIDE MKTS – should the US Dollar come off its 14 year highs & the crude continue to firm off OPEC cut-backs, corn would be a welcome beneficiary

Mar Corn has basically been range-bound since harvest (342-368) with its bearish supply fundamentals pretty well dialed in! Lower US acres & adverse S/A growing weather could push Mar Corn out of this range on the upside!

MAR WHEAT

Mar Wht was able to extend its rally which started in late Dec by advancing 15 cents last week to a 423 close. All told, the mkt has been able to rally 35 cents since Dec 23. Analysts point to winterkill & a dramatic reduction in WW acreage as the primary reasons for the upsurge!

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FACTORS IMPACTING THE MKT

  • EXPORTS – Mon Inspections were 260,555 MT (300 – 700) – Fri sales were 183,000 MT (250-525)
  • HEFTY NET SHORT POSITION – those shorts make good buyers
  • WINTERKILL – not much snow-cover so these cold snaps can inflict damage
  • WW ACREAGE –is the lowest in over 100 years
  • INDEX REBALANCING – the funds are eager buyers in the mkt
  • ALGERIA – is seeking wht – which is a good sign for the mkt

$4.00 is a ten year low & the mkt is definitely respecting that level – especially with WW conditions deteriorating & acreage at an historic low!

FEB CATTLE

Feb Cat has shown remarkable resilience since it mounted its $20 rally (98-118) in Mid-Oct! Serious reversal action last week has only led to consolidation & not a downtrend! At this much higher price, demand was expected to taper off & supplies were suppose to increase – but just the opposite occurred!

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FACTORS IMPACTING THE MKT

  • BEEF PRODUCTION is expected to decline 385 MP from the 4th Qtr to 1st Qtr
  • THE TECHNICAL REVERSAL has been neutralized by consolidative action
  • WARMER WEATHER this week is normally bearish to cattle but not this time
  • A VERY STRONG BEEF MKT – has kept Feb Cat’s discount to cash in tact
  • DESPITE THE US DOLLAR’S 14 YEAR HIGH, exports were 20 % over the same period last year traders expected the overbought mkt to yield a substantial correction but solid “D” has kept it shallow!

FEB HOGS

Unlike its sister mkt Feb Cat, Feb Hogs does indeed act like its ripe for a steep correction.

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  • Longer term supply fundamentals look burdensome
  • More normal Midwest temps might bring out a bigger supply
  • The seasonal drop from 4th Qtr to 1st Qtr production is expected

To be the 2nd smallest in the last 8 years if exports don’t expand significantly in the short term, the mkt could well succumb to some serious profit-taking!

 

Questions? Ask Bill Moore today at 312-264-4337

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