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
May Beans started the year at 1010 – rallied 80 cents (1010-1090) off perceived S/A weather issues & then broke $1.50 (1080-930) as the Argentine & especially Brazilian Bean Crops continued to grow. Then exhausting the down was the USDA 3/31 acreage report calling for a record 89.48 MA- 6 MA over 2016!
FACTORS IMPACTING THE MKT
- EXPORTS – Mon Inspections were 430,879 (400-600) & Thur sales were 865,000 (400-600)
- PLANTING PROGRESS – it’s early but corn planting is behind at 6% (LY – 12, Avg – 9) – & less corn would imply more beans
- USDA SAYS THERE’S A LOT MORE – the Mar 9 S & D, the Mar 31 ACREAGE & THE APL S & D all point to a record Brazilian Bean crop, record World Stocks & record US Bean Acres! That’s a lot of supply – but How much is already factored in?
- US DOLLAR DOWN – President Trump said the dollar was too high – Then the ongoing Korean crisis – as both pushed the mkt lower
- WEATHER PREMIUM – the mkt has been so focused on how good things Are – it isn’t even considering if things don’t go well for the US crop – Currently going in the ground
And now the moment of truth has arrived – will producers really plant an additional 6 million acres – will exports continue at a current robust pace? Our take is that a lot of supply is already dialed in & it won’t take much to ignite a weather rally.
Amidst all the doom & gloom surrounding the Bean mkt – weighed down by a record Brazilian crop & record US acreage planned –is a corn mkt that may have fundamentals turning positive. The mkt action to date suggests that – May corn is higher on the year while May Beans are down 62 cents & May Wht is down 11 cents.
- US acres are projected to be down 4 MA
- The mkt is hovering just over 10 year lows
- The exports remain robust – normally over 1 MMT – every Mon & Thur
- If the wet weather continues, corn acres will go to beans
Any weather issues will definitely jump corn prices!
The crop ratings for winter wheat issued Monday at 3pm went up 1% to 54% & the mkt took its cue from that – eventually making new lows for the year at 410 – down 20 cents for the wk & 10 cents for the year!
- Of course, improving crop ratings suggest a better WW crop For this summer harvest
- The Bean mkt’s bearish supply fundamentals added to wheat’s woes
- $4.00 is a 10 year low but the mkt has been unable to rally From this level
- Whereas US Wht is more competitive on the world mkt – Right now, the exports aren’t really flowing
The perennial weak sister has become the weakest sister!
Starting on Wed 4/5/17, June Cat has closed up 10 consecutive days – moving from 109 to 117 – what gives?
- June Cat’s huge discount to cash has kept the corrections shallow
- Burgeoning barbeque & restaurant-go-out demand is supporting the mkt
- Cash is strong & packer margins are wide
- The Friday COF is projected to see Mar placements at 105.6% of 2016
- Open interest is at a record high
The mkt has a strong fundamentals but its massively overbought & focusing on a April Cattle-on-Feed – tomorrow at 2pm!
In stark contrast to June Cat, June Hogs have languished during the month of April – losing almost $4.00 already.
- Hefty short-term supply has acted like an anchor around the mkt
- June Hogs are at a normal 11.00 point premium to cash for this Time of the year
- Pork values are firming up & pork margins are strong
- The mkt is very oversold & probing for a low
- Exports are expected to increase on the current break
Cattle & hogs can’t continue to go in divergent directions for too much longer!!
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
- Morning Softs. 08/16/17
- U.S. plans sale from Strategic Petroleum Reserve
- Housing Starts and Permits & EIA Energy Stocks. The Corn & Ethanol Report 08/16/17
- Crude Draws Continue. The Energy Report 08/16/17
- Oil prices move lower on seasonal pressures
- Morning Grains. 08/15/17
- Morning Softs. 08/15/17
- Crop Progress Seen Unchanged. The Corn & Ethanol Report 08/15/17