Bill Moore
About The Author

Bill Moore

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

JULY SOYBEANS

The mkt eagerly anticipated the May 10 Supply & Demand from the USDA – looking for a little good news – and it got it!  Both bean & corn production estimates came in under last year’s record crops –  as well, world carry-out for corn & beans came in under 2016  especially in corn!  But alas, the 800 pound gorilla in the room is still planting – and with  clearing weather ahead, it’s going well!

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FACTORS IMPACTING THE MKT

  • EXPORTS – Mon Inspections were 349,385 (300-450) – Thur sales were  451,000 MMT (250-550)
  • WED 5/10/17 USDA REPORT

Bean Production –          4.255 BB (LY -4.307)

US 17-18 Stocks             480 MB (572 – exp)

Global 17-18 Stocks  –   88.8 MMT (87.4 – exp)

Brazil Beans                    111.6 MMT (111.3 – exp)

Arg Beans –                      57.0 MMT (56 – exp)

The #’s were neutral to friendly but all the mkt cares about now Is planting – which is going well – despite recent rain delays

  • PLTG PROGRESS – the crop is 32% in ( lw-14 avg 32)

Ill – 23(31)        Ind – 23 (31)     Iowa –  40(32)

  • RUSSIAN RUMORS – exports have noticeably dropped off but this morning, rumors abounded that the Ruskies were sniffing Around for some of our beans
  • OUTSIDE MKTS – the US dollar & crude oil are key auxiliary mkts

That are headed the right way to benefit the grain complex – with The US Dollar 500 points off its Dec highs & June Crude Oil $5.00 Off its spike low of just a few weeks ago!

The range bound July Beans contract may have dialed in much of the  bearish supply – & is in dire need of a weather premium – but that will probably have to wait until after planting is completed.

JULY CORN

The 5/10/17 Crop Report was decidedly friendly for corn as production was pegged at over 1 billion bushel under last year’s record 15,148 BB crop.  Furthermore world carry-out was predicted to drop 27.6 MMT (223.9 – 195.3).  The mkt took the news well closing at 374 on report day!  But then the reality of a very strong active planting campaign sunk in – dropping the mkt 6 cents from this level after report day!

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FACTORS IMPACTING THEMKT

  • EXPORTS – Mon Inspections were 1,395 MMT (800-1000) – Thur sales Were 332,000 MT (600-1050)
  • PLTG PROGRESS – is 71% in ( lw-47 avg-70) – emerged – 31% ( lw-15 avg-36)

Ill – 75 (77)      Ind – 56 (62)      Iowa – 85(75)

  • JUNE USDA CROP REPORT – very friendly production & carry-out #’s

Corn Production                        14.065 BB ( ly- 15.148)

US 17-18 Stocks                         2.110BB ( ly-2.111)

Global Stocks                              195.3 MMT ( exp-208)

Brazil Corn                                   96 MMT (exp – 94.3)

Arg Corn                                      40 MMT ( exp-38.5)

  • PLANTING DELAYS? Have been neutralized by the producers amazing ability to get a lot planted in a very short period of time – with their work ethic & Sophisticated machinery –as a result, planting progress currently matches The 5-year average!  Many states in the Western Corn belt advanced 30% from a week ago!
  • BIG SHORT OPEN INTEREST –of 208,642 contracts looms over the mkt – With many convinced another bumper crop is on the way – however Should that not transpire, “them shorts make real good buyers”!
  • WEATHHER PREMIUM – to be sure, there is none right now – the mkt May well wait until after planting to put one in!

Despite a friendly May Crop Report & 3-4 million less acres, the July Corn contract is mired in a sideways range  ( 362-378) & probably will be until planting is completed.

JULY WHEAT

 Despite some inclement weather in the plains, July Wht has nose-dived during the month of May – losing 35 cents (460-425) from high to low!  Fundamentals abroad ave trumped those domestically – as benign weather in Europe, the Black Sea & Canada – promising better crops – have weighed on the mkt!

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  • The USDA 5/10/17 Report came out neutral as 17-18 US Stocks were Under guesses & 17-18 Global stocks were over
  • WW ratings dropped from 53 to 51% & Spring Wht Pltg is ahead at 78% (avg – 73)
  • The managed money short position is 124,638 – pretty hefty for now
  • Early excess moisture in the plains- originally considered to be harmful Is now thought to be advantageous to the developing crops
  • Weather premiums in Corn & Beans should soon appear & will spill over

JUNE CATTLE

In just 2 weeks time, June Cat has lost $14 (134-120) as increased plmts & mkt ready supplies have weighed heavily on a mkt – that was extremely overbought  at its peak of 134 on May 4.  But now the tables have been reversed & the mkt is extremely  oversold – sitting at a $15 discount to cash.

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  • After a long hiatus, China will begin importing US beef again by July 16 But its impact may be slow developing
  • Surging beef prices have kept the mkt honest
  • Increasing placements in the past 3-4 months have made the mkt Fearful bigger supplies are right around the corner
  • However, the huge discount to cash June Cat holds to cash Has already factored in increasing supplies
  • Barbeque & restaurant demand remain strong heading into MD W/E!

JUNE HOGS

During a similar time period, while June Cat was breaking $14, June Hogs were able to rally $3.00 (74.50-77.50) – so what happened?

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  • June Cat’s meteoric rise in April & earl May rendered June Hogs entirely
  • Too cheap as consumers opted for the “white meat”
  • Surging cash values pushed cut-out to its highest level since Feb 15
  • Seasonally tightening pork supplies are helping the price action
  • The export mkt has been very strong – & has added to stout domestic :”D”
  • Going into Memorial Day W/E!

June Hogs have assumed the upside leadership of the meat complex!

 

Questions? Ask Bill Moore today at 312-264-4337

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