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
We’re definitely right in the middle of a weather mkt with the attendant Volatility – Tues’s action was a prime example – with the mkt opening 25 higher Tues nite – but settling almost 20 lower! The opening was prompted by a larger than expected dip in the crop ratings but was neutralized by a cooler, wetter weather forecast! Still, given that Beans are an August crop, it’s way too early to put them away!!
FACTORS IMPACTING THE MKT
- EXPORTS – Mon Inspections were 596,000 MT (200-450) – Thur Sales Were 1.932MMT (1.4-2.1)
- CROP RATINGS – Good-to-Exc dropped to 57% (LW-61)
Ill – 59 (67) Ind – 47(49) Iowa – 62(63)
Blooming – 69(67) Setting Pods – 29 (27)
These #’s opened the mkt sharply higher but it couldn’t hold the rally
- USDA JULY REPORT
Prod – 4.260 BB (Est – 4.241, LY- 4.307)
Yield – 48.0 B/A (Est – 47.8, LY – 52.1)
Stocks – 460 MB (Est – 483)
Global – 93.5 MMT (Est – 92.2)
- WEATHER – “Hot & Dry” has been an issue this season but an inconsistent One – too often giving way to cool, wet periods
Even with this week’s precipitous drop from the highs, Nov Beans are still 40 cents up on the month – with the critical pod-setting dead ahead!
Dec Corn has had the roller coaster ride you would expect during the month of July – “POLLINATION MONTH” – rallying almost 25 cents in early July – only to break 36 cents from it’s highs off a bearish weather forecast! The mkt, in effect, has traded down to the low end of its 4 month range – and this should probably hold the mkt – given its cheapness, a sharp reduction in corn acres, solid exports & a falling US Dollar!
FACTORS IMPACTING THE MKT
- EXPORTS – Mon Inspections were 935,000 MT (750-1.175) – Thur sales were 578,000 MT (350-800)
Mon – 135,000 MT to Unk
- CROP RATINGS – Good-to-exc – 62% (LW-64)
Ill – 63(62) Ind – 47(47) Iowa – 68(71)
Silking – 67(69)
- JULY USDA REPORT
Prod – 14,065 BB (ly – 15,148)
Yield – 170.7 B/A (ly – 174.6)
Stocks- 2,295 MB (May – 2,295)
Global – 194.3 MMT (May -195.3)
- WEATHER FORECASTS- it seems the mkt is only as good as its latest 6-10 or 8-14 forecast –as evidenced by the volatile swings Since late June –
- a) 40 cents up (376 – 416)
- b) 34 cents down (416 – 3820
- c) 24 cents up (382 – 406)
- d) 26 cents down (406 – 380)
In the last two months, Dec corn has been in a broad range (374-418) a full-fledged drought is not the scenario – but there are enough crop issues to keep the mkt range-bound – non-weather factors such as a falling dollar, a rallying crude oil mkt & solid exports are helping to support!!
Day two of the Wheat Quality Council Tour found average Spring wht yields at 35.8 bu/a (ly – 46.9 avg – 46.6) – today is the last day of the tour! It appears the mkt rallied hard since Mid-May – over $3.00 in the Minn Spg Wht contract – but overstated the damage- then corrected – but now the crop tour is re-acquainting the trade with how much damage was exacted upon the crop!
After dropping $13 since early June, Aug Cat has fallen into a $5.00 range (113-118) for the past 6 weeks! The Bears point to a down cash mkt, upcoming production increases for the 3rd & 4th Qtr & a large long open interest! The Bulls have a large discount to cash on their side! As a result, the two opposite camps are offsetting each other –keeping the mkt range-bound!
Despite the “Dog Days of Summer” & a slumping , stagnant cattle mkt, Aug Hogs have hung tough – still remaining within a few dollars of their early July highs!
The strength is derived from two factors:
- Oct Hogs have a $22 discount to cash – normally its $14
- The 7/25 Cold Storage showed a 30 % drop in pork belly stocks
From last month – 22,291 (31,589) – reflecting the “uber demand” for Bacon – nowadays!
Questions? Ask Bill Moore today at 312-264-4337
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