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 Beans had a real roller-coaster ride – buffeted by the world ‘s voracious appetite for our grains & a slumping dollar – against benevolent weather in South America – promising a record crop – at least in Brazil! S/A trumped all forcing a 27 cent weekly loss & a close at 1032 – a two week low!
FACTORS IMPACTING THE MKT
- EXPORTS – Mon Inspections were 1,145,000 MMT (LW – 1,049,000) Thur sales were 1,097 MMT (500 – 750)
Tues – 142,5000 MT – Mexico
- SOUTH AMERICA – early concerns that heavy rains & flooding had hurt Soybean yields in Argentina have given way to ideas that the wet weather may actually deliver better-than-expected yields – and on top of this, Brazil’s harvest is running well ahead of schedule & is expected to be A record
- US DOLLAR – hasn’t made new highs in almost 2 months & it appears the 14 year highs scored late last December – may be it – a lower dollar Would go a long way in fortifying our exports – which have been robust Anyway
- BIRD FLU – is getting a lot of lip service but we feel long term – it won’t Be a major mkt factor
- FUND BUYING & INFLATION – the funds seem interested in buying undervalued commodities – Beans & Corn would certainly qualify
- TRUMP WILDCARD – they say a “rising tide floats all boats” & Should Trumps Presidency ultimately be good for business – as many feel –Then there would certainly be a spillover into the grains
- WHAT WINTER? Chicago has just finished its 4th record-setting day of 65-70 temps – in a virtually “snowless” winter – could this be a Harbinger for this summer!
The mkt is currently dialing in a record Brazilian Crop but exports keep coming! And what if US 2017 growing weather isn’t so great?
After posting a 6-month high last Thur, Mar Corn reversed 12 cents to finish the week at 368 – down 6 cents! Contributing to the reversal was benevolent SA growing conditions, adverse trade rumors about Mexico, general Farmer selling & a 30 cent break in Mar Beans.
FACTORS IMPACTING THE MKT
- EXPORTS – Mon Inspections were 1,258,000 (LW -1,123,000) – Thur sales were 1,068,000 (800-1.1)
Mon – 101, 600 MT to Unk
Tues – 229,000 MT to Japan
Fri – 194,112 MT to Japan
- SOUTH AMERICA – analysts say Argentine crop losses due to Excessive rain aren’t as bad as originally thought & Brazil Is on a record pace
- DEMAND – exports have been nothing short of robust & ethanol demand Is strong
- MEXICO – Trump’s early rhetoric implies that Mexico may buy more S/A corn at the expense of the US
- FARMER SELLING- from both hemispheres curbs rallies from time to time
- LESS ACRES – talk is 2-4 million less acres of corn getting planted In a few months – we’ll see – but definitely less than 2016!
- 8-9 YEAR LOWS – three consecutive years of bumper crops have Driven prices down to 2008-2009 lows – that’s plenty cheap as you
Well know Simply put, the mkt is extremely undervalued & a host of factors could rally corn – not the least of which is weather! I mean 70 degrees in Feb & no snow – REALLY?
Much like Mar Corn, Mar Wht succumbed to an extreme over-bought condition with a strong key reversal on Thursday –going from 10 cents higher to 10 lower! when the smoke cleared, the mkt closed 8 cents lower on the week – after posting new highs for the move early Thursday. The reversal was more technically driven than fundamentally!
FACTORS IMPACTING THE MKT
- EXPORTS – Mon Inspections were 307, 506 MT (LW – 682,840) – Thur sales were 588,000 MT (300-5000
- CORN & BEANS – when Mar Corn loses 10 & Mar Beans 30, Mar Wht Will lose as well as it’s the traditional “weak sister”!
- WINTER WHEAT – no snow cover but no cold weather either – So it’s a wash!
- WORLD CROPS – a larger Indian crop & a record Australia crop both Helped to pressure the mkt last week – the Russian crop is down From 2016 but that’s old news
- OPEN INTEREST – is down 29,339 contracts since Jan 31st on Short covering
Mar Wht is still the upside leader as US Wheat is a little more competitive on the world mkt
After a near $20 run-up since Nov, Apr Cat corrected $8 since Mid-Jan but last week stabilized – gaining $2.25 for the week!
- Apr Cat holds a massive discount to cash Beef Production from the 4th Qtr to the 1st Qtr is expected to show The biggest drop on record
- A surge in Hog prices helped support active buying in cattle
Amazingly, cattle demand – even after a $12 rally – is still strong!
Apr Hogs assumed the upside leadership in the meat complex – punching out new highs in early Feb at $72.50. This mkt has drawn strength from record pork exports in Dec & tremendous bacon demand! But there are worries on the horizon.
- Bird flu is lifting its ugly head in China – jeopardizing demand there
- Trump’s heavy handed rhetoric is suggesting a trade war with Mexico – impeding demand there
- The mkt is extremely overbought
Still, last week, April Hogs advanced $1.00!
Questions? Ask Bill Moore today at 312-264-4337
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Past results are not necessarily indicative of future results. Investing in futures can involve substantial risk of loss & is not suitable for everyone. Trading foreign exchange also involves a high degree of risk. The leverage created by trading on margin can work against you as well as for you, and losses can exceed your entire investment. Before opening an account and trading, you should seek advice from your advisors as appropriate to ensure that you understand the risks and can withstand the losses.
The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or futures. The Price Futures Group, its officers, directors, employees, and brokers may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction. Reproduction and/or distribution of any portion of this report are strictly prohibited without the written permission of the author. Trading in futures contracts, options on futures contracts, and forward contracts is not suitable for all investors and involves substantial risks. ©2017
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