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
The last two days, the action in Nov Beans has epitomized the Trading-range nature of the contract thru Sept! On Friday, the USDA issued a friendly Qtly Stocks Report that moved Nov Beans to mid-range, but then today, heavy harvest pressure took away all those gains!
FACTORS IMPACTING THE MKT
- EXPORTS – Mon Inspections were 894,250 MT (1,036,604) & Thur sales were 3.0 MMT (1.82 – 2.50) – a record
10/2 – 132,000 China
9/28 132,000 Unk
9/27 132,000 China
- CROP PROGRESS – Harv – 22% (LW – 10,Avg – 26)
Ill – 30 (21) Ind – 24(20) Iowa – 16(23)
- USDA QTLY STOCKS – 9/29
Bean Qtly stocks – 301 MB
(Est – 338 June -963 June ’16 – 197) These stocks were on a 10 year high but below expectations So the report was considered friendly
- 8AM FLASH SALES –
9/28 132,000 – Unk 9/15 132,000 China
9/27 132,000 – China 9/14 198,000 China
9/22 190,000 – Mexico 9/13 167,370 Mexico
9/21 132,000 – China 9/12 132,000 Unk
9/20 132,000 China 9/11 352,000 Unk
9/20 960,000 Unk 9/8 264,000 China
9/20 120,000 Unk 9/5 136,000 China
9/18 261,000 China
- BETTER-THAN-EXPECTED YIELDS –seemed to be the rule rather Than the exception – implying that the last two USDA Reports Maybe weren’t overstated after all
- OUTSIDES NOT HELPING – today the US Dollar is 50 points higher & crude oil is $1.50 lower – bad for US Exports & ethanol demand
Exports & good yields are keeping beans range-bound but excessive dryness over the past three weeks may render later yields disappointing!
For the month of September, Dec Corn has been confined to a 15-cent range (345-360). Better-than-expected yields have done battle with solid exports & a lower dollar to keep the mkt sideways – until the USDA updates production & yields on Thur Oct 12. Because of over 3 weeks of dryness in the Farm belt, many feel the later yields will be less!
FACTORS IMPACTING THE MKT
- EXPORTS – Mon Inspections were 782,346 MT (779,971) & Thur sales Were 320 MT (450-850)
Oct 2 597,464 MT China
Sept 28 233,800 MT UNK
- CROP PROGRESS – Harv 17% (LW – 11, Avg -26)
Ill – 21% (LW -11, Avg-38)
Ind – 16% (LW – 10, Avg – 23)
Iowa – 6% (LW – 6, Avg – 18)
- USDA QTLY STOCKS – 9/29
Corn Qtly Stocks 2,295 (Est-2,349 Sept 1,737)
- USDA 10/12 SUPPLY& DEMAND – will update production, yield & Carryout (domestic & world) – the better than expected yields reports Suggest the #’s will be ratcheted up again
It seems to us, from current levels, there’s considerably more upside potential than downside!
- The mkt is already on a 10 year low
- It’s been trading on 14-14.2 BB crop for several months
- Later-planted corn – as a result of all the dryness – May come in with lower yields
Much like its sister mkts, Dec Corn & Nov Beans, Dec wht has been range-bound (430-460) for the month of Sept – with conflicting fundamentals contributing to its “ebb & flow”!
- Despite earlier drought-like conditions in the Dakotas, the USDA raised Its wht forecasts for Spring wht & all wht in its QTLY report – Fri 9/29
- WW planting is behind at 36% (LW – 24, Avg – 43)
- Russia’s wht crop is still on tap to be a record
- The Australian & Argentine Crops have some issues – either too much rain Or not enough
Much like the grains, Dec Cat is also a victim of “Range-itis” – trading between $113 & $117 since mid-Sept! Once again bullish & bearish fundamentals have offset each other keeping prices range-bound!
- A week ago, both the cattle-on-feed & cold storage reports Were negative
- Higher 4th Qtr Production is weighing on the mkt
- Managed money traders are still net long 92,358 contracts – A real threat of “long liquidation selling”
- While Dec Cat languishes in a tight range, Dec Hogs have rallied $6 (low to high) since the bearish Pig Crop last week!
Dec Hogs put in a seasonal low in classic, dramatic fashion – when a bearish Pig Crop Report (9/29) ignited a near-vertical $6.00 rally & upside break-out – despite heavy production & sluggish export demand! It was a classic “buy the rumor – sell the fact” mkt action – as Dec Hogs apparently have already dialed in the big 4th QTR production increases expected!
Questions? Ask Bill Moore today at 312-264-4337
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