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 world is awash in soybeans & the key USDA Reports in March certainly substantiated that! As a result, May Beans lost 92 cents for the month. The Mar 9 Report raised Brazil Beans to 108 MMT (104) & the Mar 31 Report raised US acres to 89.5 MA (LY-83) in addition, rains have delayed corn & wht planting – acres that may go to beans!
FACTORS IMPACTING THE MKT
- EXPORTS – Mon Inspections were 620,800 MT (450-650) – Thur sales were 996,000 (350-550)
Thur – 165,000 MT to China
- USDA 3-9-17 SUPPLY & DEMAND – once again, higher than expected – Which ended up setting the tone for this month
US Stocks 2,320 MB (2,320)
GLOBAL 82.8 MMT (81.3)
BRAZIL BEANS 108.0 mmt (104)
ARG BEANS 55.6 MMT (55.5)
- USDA 3-31-17 QTLY STOCKS & ACREAGE
Qtly Stocks 1,735 MB
Pltd Acres 89.48 (Est – 88.12, LY – 83.4) 6 million more acres –even more than rumored (4-5 MA)- we’ll See if it comes to pass
- EARLY PLTG DELAYS – for corn in the Delta could mean more beans Planted later – but it is still a little early in the season for that scenario
- WEATHER PREMIUM ? Well one thing’s for certain – there is no Weather premium in this mkt after it went straight down since mid-Feb
- US DOLLAR – looked to have peaked in mid-Dec & even after a 100 point Rally, it’s still 300 points off its highs!
The supply news is bearish from both hemispheres – the question is how much is dialed in & will demand actually increase after the $1.40 break since Mid-Jan!
A quick look at the daily charts tells you that beans & corn are definitely a tale of two cities: May Corn lost 10 cents in March while May beans lost 89 cents!
- The record Brazilian Bean Crop impacts Beans more than Corn
- Corn acres are predicted to be down 4 MA – not up 6 MA like Beans
- Crude oil has rallied $5.00 – enhancing ethanol demand
- Early planting delays in corn imply less acreage
- Historically speaking, corn is cheaper than beans
At the very least, the mkt is entitled to some kind of weather premium – going into Spring Planting.
May Wht is the perennial “weak sister” to May Beans & Corn & as such will have a hard time rallying much without their help.
- $4.00 is a 10 year low & will provide substantial support
- The world wide glut of wht has largely been priced in
- At current levels, US Wht is competitive on the world mkt
- The Winter Wht Crop – while in pretty good shape – is still Not in the bin
If you like the grains, our recommended preference would be: CORN WHEAT BEANS
June Cat has broken $5.00 (114 -109) off its highs amidst conflicting fundamentals.
- The 1st to 2nd Qtr beef production shows a sizeable increase
- The beef mkt has shown weakness
- Packer margins are decreasing
- There’s a high net long open interest
On the plus side, June Cat is a whopping $18 under cash & the demand should be starting going into Easter W/E! So probably not too much more break from here!
Very simply put, the hog complex is inundated with too much supply.
- Pork Production from the 1st to 2nd Qtr is expected to decline by just 80 MP – the smallest decline since 2002
- Exports were hopefully going to pick up the slack but Mexico dropped From the Dec peak of 1.82 MP to 1.47 MP
- A slumping cattle mkt spilled over into the hog complex
On the bright side, Easter demand might be enough to prop up the mkt!
Questions? Ask Bill Moore today at 312-264-4337
A Subsidiary of Price Holdings, Inc. – an Employee Owned Diversified Financial Services Firm. Member NIBA, NFA
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
SubscribeReceive daily summaries of all Market Insights blog posts.
Enter email below.
Most Recent Posts
- 2017 June 30 US Acreage Report 06/26/17
- Morning Grains. 06/26/17
- Morning Softs. 06/26/17
- Corn Higher Early… But for how long? The Corn & Ethanol Report 06/26/17
- Drying Up. The Energy Report 06/26/17
- Deliveries Notices – Cotton/Metals/Energies/Grains/Sugar/Notes
- Rains Make Grain Not Only in Spain. The Corn & Ethanol Report 06/23/17
- Downgraded! The Energy Report 06/23/17