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
The month of Mar for the May Bean contract has been dominated by bearish supply concerns- primarily the record Brazilian harvest currently underway! And on top of that is a US Bean crop predicted to be 4-5 million more acres than 2016! The net result is a mkt down 35 for the month – but only 8 cents for the week as it tries to stabilize!
FACTORS IMPACTING THE MKT
- EXPORTS – Mon Inspections were 656,288 (500-700) – Thur sales Were 695,000 (400-600)
Mon (3-13) – 120,000 MT – Unk
Thur (3-16) – 120,000 MT – Unk
- MAR 9 USDA – bears repeating as it has cast a bearish pall Over the mkts ever since its issuance
US Stocks – 435 (414)
Global Stocks 82.8 (81.3)
Brazil 108 (104)
Arg 55.5 (55.1)
- BRAZILIAN HARVEST-has been estimated as high as 111 MT& is 75% in – They say big crops get bigger – but they also say “harv lows”kick in When harvest is roughly one-half over!
- US DOLLAR – lost almost 100 points on the heels of Janet Reno’s remarks Last Wed after she announced a ¼ % IR increase. Her dovish remarks About maybe only two more IR increases instead of 3 – ignited a Sharp sell-off in the US Dollar
- US ACREAGE- is widely rumored to be 4-5 million more acres than Last year – this has added to the bearishness created by the Brazilian & Argentine crops
- EXPORTS –have trailed off but are still adequate – for instance, Last week, we had two 8am announcements
- TECHNICALS-the mkt has descended to the low end of the 2017 range (1000-1085) – the psychologically important $10 level is trying To hold the mkt
The mkt is feeling the upcoming bearish supplies – but there is no weather premium in its price –just in case?
After plummeting 25 cents since late Feb, May Corn was able to stabilize last week – gaining 3 ½ cents. Whereas the Bean Complex is fighting bearish supplies in both hemispheres, Corn is looking at US acreage 4-5 million acres under 2016 & is sitting on 7-8 year lows. So when the grain complex breaks down, May Corn seems to hold up better than Beans & wheat!
FACTORS IMPACTING THE MKT
- EXPORTS – Mon Inspections were 1,547,022 MMT (LW-1,450,003) Thur sales were 1.47 MMT (650 – 1.1)
Tues – 120,000 MT to Mexico
- USDA MAR 9- #’s weren’t as negative as Beans as US Stocks came in Right on expectations- however other #’s were higher than pre-report Guesses
US Stocks – 2,320 (2,320)
Global Stocks 220.7 (218.6)
Brazil 91.5 (86.5)
Arg 37.5 (36.6)
- US DOLLAR – ever since the Fed announced a ¼ % rate increase last week The US $ has tumbled as Janet Yellen implied there wouldn’t be as Many rate increases as previously thought
- WEATHER PREMIUM – as of today, May Corn has given up all its 2017 gains- with planting dead ahead, the mkt needs to allow for weather Issues – particularly after the mildest winter in recent memory
There’s plenty of corn to go around but that’s why the mkt is on 7-8 year lows! Should the irregular warm & dry weather patter continue into the growing season, then corn is too cheap – particularly with robust exports & a declining dollar!
After dropping over 30 cents since early Mar, the Mar Wht contract was able to stabilize last week – finishing the wk with a minor loss!
- THE WW BELT –got a drier forecast
- COLD TEMPS – returning to the plains renewed concerns of winterkill
- EGYPT- is buying at the fastest pace since the 2011-15
- RECORD WORLD STOCKS – continue to overhang the mkt
10 year lows, a shrinking dollar & weather-related rallies in C & B could rally wht sharply!
The mkt is giving off conflicting signals but continues to consolidate near the 2017 highs
- 2ND TO 1ST QTR INCREASE – in beef production has the mkt wary
- SURGING CASH MKT – reveals added demand – even after a $12 Rally since early Dec
- JUNE CAT’S WHOPPING DISCOUNT – to cash of almost $20 – means
The big 2nd Qtr increase in production is pretty well dialed in Apr Cat continues to defy analysts predictions of a top forming – by punching out new monthly highs!
Apl Hogs posted a $1.00 gain amidst its $6.00 2017 range (66.50-72.50) as offsetting factors kept the mkt range bound
- CHINA – could be a more active buyer as bird flu concerns could shift Demand from poultry to pork
- 2ND QTR PRODUCTION – is expected to be up 6% from last year
- RECENT CASH – has been strong – reflecting good demand For pork & bacon
Generally, solid demand is supporting both cat & hogs – even after substantial rallies since last Fall.
Questions? Ask Bill Moore today at 312-264-4337
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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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