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
All week, May Beans was completely focused on the Mar 9 Report & the expectation it would ramp up the SA crops! Indeed, it did – increasing Brazilian Beans by 4 MA & Brazilian Corn by 5MA. This coupled with waning exports & a plummeting crude oil mkt – all contributed to a 30 cent lower week – as the mkt neared the 2017 lows!
FACTORS IMPACTING THE MKT
- EXPORTS – Mon Inspections were 921,779 MT (550-750) – Thur sales Were 515,000 MT (350-550)
Wed – 122,000 meal to Philippines
- MAR 9 USDA REPORT – the #’s, as expected, all came in higher than expected
US Stockpiles – 435 MB (414)
Global Stockpiles 82.8 MMT (81.3)
Brazil Beans – 108 MMT (1061.1)
Arg Beans 55.5 MMT (55.1)
- CRUDE OIL – had a brutal week loosing 10% (53.40 – 48.98) –as the Mkt entered “freefall” mode – falling to 3-month lows- oversupply & an Extremely mild winter so far were targeted as the culprits
- TECHNICAL DAMAGE – the mkt easily took out the Feb lows en route To the 2017 lows (1001) – pulling up just short late Friday
- US ACREAGE – is widely expected to be increased by 4-5million acres & this has been overhanging the mkt
The first half of Jan looked very promising for May Beans as they climbed 85 cents (1001-1086) off Argentina weather woes. But they were exaggerated while Brazilian bean production kept getting ratcheted up! The result was a complete retracement of the Jan rally as the mkt settled on Fri basically unchanged for the year!
Since early Jan, May Corn has been basically range bound (360-386) & in the last two weeks, the mkt has gone from the top to the bottom of the range! This past week, May Corn lost 17 cents – as the Thur USDA Report – showed a 5 MMT increase in Brazil’s corn crop. This in addition to the plummet of crude oil simply overcame the mkt!
FACTORS IMPACTING THE MKT
- EXPORTS- Mon Inspections were 1,444,972 MMT (1.0-1.3) – Thur sales Were 834,000 MT (700-1,000)
- MAR 9 USDA – reflected neutral & negative #’s – but taken with the beans #’s – yielded an overall bearish reaction
US Stockpiles – 2,320 MB (2,320)
Global Stockpiles 220.7 MMT (218.6)
Brazil Corn 91.5 MMT (86.5)
Arg Corn – 37.5 MMT (36.6)
- CRUDE HURTS ETHANOL – with the precipitous drop in May Crude Futures, Ethanol demand could well take a hit
- BULLS HANGING ON – US acreage is still forecast down 4-5 million acres & The mkt is hovering just over 7-8 year lows
May Corn is back down to basically unchanged for the year & probably needs some type of weather premium – with the planting season dead ahead!
May Wht was more a victim of its sister mkts, May Beans (down – 30) & May Corn (down 17) – than anything else last week – as it incurred a wkly loss of 14!
- WW ACREAGE is still the lowest in over 100 years
- THE WW CROP is still in need of moisture
- EVEN THOUGH EGYPT recently rejected 3 cargoes of wht, They’re still quite active in the export mkt
- THE USDA REPORT actually reflected lower US Stockpiles Than expected & marginally higher world stockpiles
Wht is hovering just over 10 year lows but needs help from Corn & beans to rally from here!
In a down week for grains & crude oil, Apl Cat performed well gaining $1.50 (116 – 117.50)!
!) RETAIL DEMAND- is still strong even at a level $10 higher than last fall
2) A JUMP IN BEEF PRICES – has supported
3) APL CAT’S huge discount to cash has priced in the bearish 2nd Qtr supplies
4) WHEREAS the 2nd Qtr is expected to reflect a big increase in production,
Short term supplies are relatively tight
The uptrend is still intact!
Apl Hogs have been confined to a tight range (66.50-69.50) since Mid-Feb but this past week, managed to eke out a $.75 gain – in spite of the fact that 2nd Qtr Pork production is expected to be 6.7% over 2016. However, supporting the mkt is:
- A BIG DISCOUNT –already in Apl Hogs
- VERY STRONG EXPORTS – from Mexico & China
- STRONG DOMESTIC “D” – for bacon
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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