After the USDA issued yet another Bearish monthly crop report on Sept 12, Nov Beans – after an initial spike down to 20 lower – recovered to a Mid-range close & two days later had traded to its Sept highs – some 40 cents off the report-day lows! This mkt action tells us the mkt feels that the final results – will be something less than the 4.431 BB/49.9 Bu/A that the USDA reported a week ago today!
FACTORS IMPACTING THE MKT
- EXPORTS – Mon Inspections were 928,575 (LW- 1,106,758) & Thur sales Were 1.1612 BB (1.0-1.3)
9/8 – 264,000 MT to China
9/11 – 352,000 MT to Unk
9/12 – 132,000 MT to Unk
9/13 – 167,370 MT to Mexico
9/14 – 198,000 MT to China
9/15 – 132,000 MT to China
9/18 – 126,000 MT to Unk
9/18 – 261,000 MT to China
- SEPT 12 CROP REPORT
Prod – 4.431 BB (Est- 4.328 Aug – 4.381 2016 – 4.307)
Yield – 49.9 B/a (Est – 48.8 Aug – 49.4 2016 – 52.1)
- CROP RATINGS – G/Ex – 59% (60)
Ill – 53 (57) Ind – 52(52) IA – 58(61)
Dropping leaves – 41% (Lw – 22 Avg – 43)
Harvest – 4% (avg – 5)
- TOO DRY – dryness in the Farm Belt is pushing Beans to maturity – Not allowing pods to fully develop
- SOUTH AMERICA – planting is beginning but currently its Too dry in Brazil & too wet in Argentina
The $64 question is whether harvest results will bear out the USDA estimates from Aug & Sept Reports – which many feel are too high – based on the uneven crop conditions since planting!
Despite the results of various crop tours & general observations from producers concerning the high variability of the corn crop, the USDA continues to ratchet up their crop estimates! Harvest could well tell a different story! Meanwhile, the latest USDA offering forced Dec Corn to retest its August lows – which it successfully held!
FACTORS IMPACTING THE MKT
- EXPORTS – Mon Inspections were 676,819 MT (676,243 Lw) – Thur sales were 1,046 MMT (800-1,000)
9/6 – 253,000 MT to Mexico
9/8 – 179,324 MT to Unk
- SEPT CROP REPORT
Prod – 14,185BB – (Est – 14.035 Aug – 14,153 2016 – 15,148)
Yield – 169.9 B/a – (Est – 168.2 Aug – 169.5 2016 – 52.1)
- CROP RATINGS- G/ex – 61 (61%)
Ill – 52 (56) Ind – 52(52) Ia – 59(60)
Dent – 86 (Avg – 90) Mature – 34 (Avg – 47) Harv – 7(Avg – 11)
- PRICE LEVEL & CROP SIZE – Dec Corn is sitting on a 10 year low with Total production roughly 1 billion bushel under last year’s record – 15,148 BB
Are we low enough?
They say, “BIG CROPS GET BIGGER” but we’ve heard enough reports to the contrary in this particular year – to make us very anxious to see if actual harvest results bear out the USDA #’s!
Even though Dec Wht is tied at the hip to Nov Beans & Dec Corn, it showed signs of breaking out of its month-long congestion area (425-450) – based on its key reversal – up off the USDA 9-12 Monthly Supply & Demand Report!
- The net short 104,595 contracts will cover quickly on an upside break-out
- With the US Dollar down 10 % for the year, exports should flow
- Egypt is tendering for Wht today – albeit from Russia, Romania & France
- The larger Russian wht crop has already been dialed in
If corn & beans turn up, wht could lead the way!
Oct cat has been mired in a sideways pattern since 8/10 (104-110) as the mkt attempts to carve out a low amidst plentiful supplies! It has been buffeted about by conflicting factors.
- Cheap Corn & good weather
- A higher-than-average premium of Oct Cat to cash
- A record 3rd to 4th Qtr increase in production of 335 MP
- An expected record decrease in beef production from
The 4th to 1st Qtr of 705 MP
- A price level that seems low enough to attract solid demand
Much like Oct Cat, Oct Hogs have been confined to a trading range – albeit with a downward bias (59-64)! Both positive & negative factors contributed to its 4-wk ebb & flow!
- Oct Hogs are at a $7.25 discount to cash (avg is $1.45)
- Two new slaughter houses opened recently (Ia & Mi) & Eventually will help demand
- The 3rd to 4th Qtr production increase was seen as bearish
- On the other hand, the 4th to 1st Qtr production is predicted To drop a record 510 pounds
- A seasonal decline is underway
Many feel the burdensome supply is dialed in.
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
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