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 succumbed to bearish supply pressure from both hemispheres – as Brazil continues on a record pace & the USDA AG OUTLOOK confirmed 4.6 MA more of US beans could be planted in 2017. The result was new lows for the month of Feb & 18 cents lower on the week!
FACTORS IMPACTING THE MKT
- EXPORTS- Tues Inspections were 1.076,000 MMT (1.1-1.3) – Fri sales Were 442,000 MT (550-850)
- USDA AG FORUM – issued their annual crop & carry-out estimates – There were no surprises but the numbers reminded the trade of another Big crop – potentially
- a) 8 million acres pltd (8.34 – 2016)
- b) Production – 4.190 BB (4.307 – 2016)
- c) Yield – 0 B/A (52.1) – 2016)
- d) Ending Stocks – 420BB (420-2016)
3) SOUTH AMERICA – Brazil’s record crop estimates are up to 107 MMT &
Argentina flood-plagued crop is slowly recovering
4) IS DEMAND ENOUGH – for several months, export demand has been
Robust –but lately can’t keep up with record crop estimates
5) VERY MILD WINTER – 70’s & no snow so far in Feb – have traders &
Producers wondering about this summer
Mar Beans have traded 70 cents down off the 2017 supplies that aren’t in the bin or not even planted yet! The mkt seems t be getting ahead of itself!
Despite positive #’s from the USDA AG FORUM & impressive exports all week, Mar Corn fell victim to benevolent South American weather & spillover pressure from Mar Beans & Wheat – as it registered a weekly 3 ½ cent weekly loss!
FACTORS IMPACTING THE MKT
- EXPORTS – Tues Inspections were 1,152,000 MMT (1.1 – 1.3) & Fri Sales Were 1,000,700 MMT (800-1.1)
Tues – 269,000 MT – Japan
111,200 MT – Unk
- USDA AG FORUM – looking closely at the numbers projected by the USDA on Thur & Fri, it’s hard to believe Mar Corn closed lower last week
- a) ACREAGE TO BE PLANTED – 90ma (94-LY)
- b) PRODUCTION – 14.065bb (15,148 – LY)
- c) Yield – 170.7 b/a (174.6 – LT)
- d) Ending stocks – 2,215 bb (2,320 – bb)
- SOUTH AMERICA – the bearishness from S/A has been centering Around the record Brazilian Bean Crop – now one-quarter harvested – But the spillover is negatively impacting corn – Arg & Brazil corn are up From last year
Mar Corn is 16 cents off its recent highs but 42 cents off its Dec lows. much lower acreage this Spring & its current 7-8 year lows price level makes Mar Corn the strongest member of the grain complex!
Much like Mar Corn, Mar Wht closed lower last week – despite friendly projections from the USDA’s AG FORUM! However, the mkt could well have been still reeling from a key reversal – a week ago Friday – when the wht – after making new highs at 465, closed lower.
FACTORS IMPACTING THE MKT
- EXPORTS – Tues Inspections were 558,252 (350-550) – Fri sales Were 707,000 (350-550)
Tues – 148,000 MT – Unk
- USDA AG FORUM – by now the 100 year low WW acreage has been Well-documented but its still very noteworthy
Planted Area – 46 MA (50-LY)
Production – 1.837 BB (2.310 – LY)
Yield – 47.1 B/a (52.6 – LY)
Ending stocks 905 MB (1,139- LY)
- WORLD CARRY-OUT –is still coming in at a record level
- HISTORICALLY CHEAP – 10 year low price levels have helped Make our wht more competitive on the world mkt
- EGYPT – is in the mkt most every week to make wht purchases Though not from the US – still it’s a good sign!
Mar Wht had run up 70 cents since late Dec (395-465) & with last week’s down, has corrected roughly 40%. A resumption of the up from here will require some help from Corn & Beans!
After running up $18 (102-120) since early Nov, Apl Cat has consolidated in a $5 range (112 – 117)
- JUNE CAT – is at a hefty discount to cash
- 1st QTR PRODUCTION – is expected to be down a record 643 MP
From the 4th Qtr
- CASH- has surged in the past week
- WEIGHT DATA – suggests producers are extremely current
- THE FEB COF – projected a 11% increase in placements &
That’s exactly how the report came out Impressively, Apl Cat is holding as demand appears as good as it was $13 ago
Apl Hogs corrected an extreme over-bought condition by breaking $5 in 3 days (71-66) – closing down for the $2.50
- JAN 31 COLD STORAGE – was up 10% over last year – Much less than the normal increase
- BELLY PRICES – collapsed last week
- THE DEC EXPORT PACE – will be hard to maintain
- IF MEXICO DROPS, we’ll need more business from China
Much like cattle, hog demand is holding up remarkably well despite last Fall’s rally!
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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