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
When is enough – enough? After getting pummeled in March to the tune of 94 cents, May Beans have stabilized so far in April – currently trading higher on the month! The Mar 9 Supply & Demand, the Mar 31 stocks & acreage & the April 11 S & D – all reminded traders of the big crops & record carryout! Much of these are dialed in – with decent exports & a weather premium dead ahead!
Corn & beans are two different animals – while May Beans easily made new lows for the year in March, May Corn didn’t & currently sits in the middle of its 2017 range (358-388).
- Corn acres are forecast to be down 4 MA – not up 6 MA!
- Historically speaking, corn is cheaper than beans- sitting on 7-8 year lows
- If early rain delays extend into late April, even less corn will be planted
- Exports are routinely running over 1 MMT evey Mon &Thur
- There’s no weather premium in the price
If any weather glitch occurs this season, prices are way too low!
May Wht is the outlier – May Corn & Beans are the dominant mkts in the grain complex – wht is most always the weak sister. But sensible arguments can be made for wht basing out as C & B establish weather premiums.
- WW acreage is the lowest in over 100 years
- The record world carry-out stocks are becoming dialed in
- The wht prices are on 10 year lows
- Some foreign crops have issues
We feel wht is thru going down – & will certainly rally with C & B as they implement weather premiums!
In the past 3 weeks, June Cat has dropped $5 (114-109) & then rallied $5 (109-114) – mostly off the expected 2nd Qtr increase in beef production. However, the massive $18-19 discount to cash is keeping the mkt honest & limiting the expected sell-off due to weakening cash. Also, talks with China about expanding exports has helped support the recent rally!
June Hogs are plagued with the same problems as June Cat – a big increase in 2nd Qtr Hog Production. But unlike the cattle, the June Hog contract does not have a big discount to cash! The only thing to offset big supplies would be solid Mexican Imports & so far, they haven’t been enough! As a result, June Hogs are on 6-month lows at $72.25!
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
- CME Margin Changes Effective Today
- Morning Grains 07/26/17
- Morning Softs 07/26/17
- Give me those Old Time Fundamentals. The Energy Report 07/26/17
- Busy Day Ahead. The Corn & Ethanol Report 07/26/17
- Here’s why oil just scored its biggest one-day rally of 2017
- The Windy City Trader 7/25/17
- Morning Grains 07/25/17