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
Bean harvest is all but over at 83% done (avg – 84). This validates the Aug 16 low at 921 as the official HARVEST LOW! Since that low was made, the mkt has sideways traded its way higher – currently sitting 50 cents off its low! “Crop Concerns” will shift from the US harvest to S/A planting! In addition, exports & the US Dollar will occupy center stage!
FACTORS IMPACTING THE MKT
1) EXPORTS – Mon Inspections were 2.505 MMT (lw – 2.585) – Thur sales Were 2.13 MMT (1.2-1.8)
Oct 27 – 238,000 MT China
2) HARVEST PRESSURE – beans are 83% in (lw – 70, avg – 84)
Ill – 73(84) Ind – 59(71) Iowa – 44(70)
Gd/ex – 66% (66)
3) NOV 9 USDA REPORT –the last govt report for 2017 – may come in Slightly under the Oct Report as early-season dryness has reduced Some of the later bean yields
Oct Bean Prod – 4.431 BB (ly – 4.296)
Oct Bean Yield – 49.5 B/A (ly – 52.0)
4) SOUTH AMERICA – too dry up North –too wet South but conditions are Improving – as the weather focus will be almost 100 % on S/A as the US wraps up its harvest
5) US DOLLAR – has been making higher lows & higher highs since early Sept – Rallying 400 points – after dropping 1200 since the first of the year! Hopefully, just a correction in a “Bear” as US exports need a lower $
Harvest pressure is in the rear view mirror as the mkt digests a record bean crop of 4.4 – 4.5 BB! The good news is that exports have been robust & the mkt has been dialing in the gargantuan crop for several months now!
Dec Corn stubbornly clings to a tight 15 cent trading range (345-360) as better-than-expected yields keep the mkt languishing – even as harvest passes the 50% mark! All eyes will be on the USDA’s NOVEMBER REPORT to see if production & yields match the “better-yield” reports!
FACTORS IMPACTING THE MKT
1) EXPORTS – Mon Inspections were 517,679 MT (639,0290 –
Thur sales were 1.3 MMT (800-1.4 )
Oct 27 132,000 MT Spain
Oct 20 120,000 MT Spain
120,000 MT Unk
2) HARVEST PROGRESS – Corn is 54% in (lw – 38, avg – 72)
Ill – 73 (avg – 84) Ind – 59 (avg – 71) Iowa 44 (avg – 70)
3) NOV USDA UPDATE – on Thur 11-9, the USDA issues its final crop report For 2017. According to ongoing yield reports, analysts are expecting Increased yields & production on 11/9
Oct ’17 Production – 14,280 BB
Yield – 49.5 B/A
4) GOING FORWARD – with corn harvest over ½ done & beans over ¾ done, Focus will be shifted to South American planting weather – along with Exports & the US Dollar!
Early-on, nobody was buying the USDA’s hefty production estimates but now at least in the case of corn, it seems that their prediction was “on target”! But the $64 question would be – is the mkt cheap enough? We think so – would you rather buy a 10 year low or sell it?
Dec Wht has redefined the term “weak sister” as it finished the month of Oct –scoring new contract lows! For Oct, Dec Wht was down 29, KC down 26 & Minn down 11!
1) Not only is the contract dealing with the 3rd consecutive year of Record global stocks but also with a record bean crop & the 3rd biggest corn crop ever!
2) China & Russia have signed protocols allowing Russia wht imports By China
3) Russia wht exports are up 21% from last year
4) The first gd/ex conditions on the recently planted WW were 58% (ag-54)
We can only hope the lower prices will make our wht competitive globally
Dec Cat has been a real fooler – moving exactly contrary to what the fundamentals would dictate in the past 10 days. First, the well-chronicled production increases from the 3rd to 4th Qtr – & second, the bearish Cattle-on-Feed Report issued on 10/20/17. Despite these two events, Dec Cat has rallied $10 since 10/23 (115-125)! And now the mkt finds itself extremely overbought & carrying a hefty premium to cash! A correction is in order but very strong demand will keep the uptrend intact!
Much like the Dec Cat contract, Dec Hogs have been very deceptive – with fundamentals pointing South but technicals showing “up” – with an upside break-out yesterday which had Dec Hogs briefly limit-up!
1) Increasing slaughter & production just ahead – coupled with a 38% reduction in pork imports had analysts leaning down!
2) The recent surge in the US $ bodes ill for export demand
3) Recent USDA Reports – a COF & a Cold Storage – were decidedly negative
4) However early Holiday demand & a resurgent cattle mkt ignited an
Almost vertical breakout yesterday
Supply is substantial but DEMAND is even better!
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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