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 trade eagerly awaited the 11/9 USDA Report & were greeted with a bearish surprise – especially for corn – where both total production & yield came out over the expected ranges! It appears that seed genetics baled the mkt out – after a rough weather start! Going forward, South America growing weather will replace US Harvest as the main key.
FACTOR S IMPACTNG THE MKT
- EXPORTS – Mon Inspections were 2.219 MMT – Thur sales were 1.16 MMT (1.00- 2.050) Nov 13 – 135,000 MT Philippines
- THUR 11/9 – USDA REPORT – the Bean #’s were lower/unchanged from the Oct Report but higher than expectations – the entire mkt was pulled Down by corn’s bearish surprise
PRODUCTION 4.425 BB (exp – 4.404, Oct – 4.431)
YIELD 49.5 B/A (exp – 49.2, Oct – 49.5)
US STOCKS 425 (exp – 420, Oct – 430)
GLOBAL 97.9 (exp – 95.5, Oct – 96.1)
- HARVEST PROGRESS – Beans are 93% in (lw – 90, avg – 95) Ill – 95 (98) Ind – 89(85) Iowa – 97 (92)
- SOUTH AMERICA – central & Northern Brazil received good rains Whereas Southern Brazil & Argentina are drier & both these could help Advance planting
- US DOLLAR – while the Dec $$ contract has rallied 400 points since Sept 1, its still down 900 points from the first of the year! A real positive For US exports
After breaking the $10.00 mark for the 3rd time since Mid-Oct, Jan Beans retreated rapidly from this level on the heels of the USDA Report – back into its recent range! It will take S/A weather issues to get it back up there!
More than a few eyebrows were raised by the USDA’s Nov 9 Supply & Demand report – at 14,568 BB & a record 175.4 Bu/A. But the technical damage does not really match the bearish #’s – as the mkt only broke down to the low end of its 2-month range (342-360) & has since consolidated there. Possibly, the mkt feels “enough is enough” and that current mkt levels have already discounted the 14.2 – 14.5 crop!
FACTORS IMPACTING THE MKT
- EXPORTS – Mon Inspections were 37,000 MT – Thur sales were a whopping 2.9 MMT (1.0 – 2.6)
Nov 7 130,000 Unk
Nov 6 130,000 Unk
Nov 3 102,400 Mexico
Nov 3 135,000 S Korea
Nov 3 251,000 Unk
Nov 2 845,820 Mexico
Nov 2 510.540 Mexico
- 11/9 USDA REPORT – well.” nobody saw that coming” – a big jump In corn production & a “record “ 175.4 B/A yield!
Production 14,578 BB (exp – 14,323, Oct – 14,280)
Yield 175.4 BB (exp – 172.3, Oct – 171.8)
US STOCKS 2,487 (exp – 2360, Oct – 2340)
GLOBAL 203.9 (exp – 201.5, Oct – 201.0)
- HARVEST PROGRESS – is 83% in (avg – 91) Ill – 90 (96) Ind – 80 (90) Iowa – 85 (92)
- TURN THE PAGE – harvest will soon be in the rear mirror & focus Will be centered on S/A planting, exports & the US Dollar – the next USDA Report will be the final #’s in Jan
Whether, 14.2 or 14.5 BB, the corn crop is substantial, but the mkt has been trading on those #’s for 2-3 months. Plus, current prices are on a 10-year low Is ENOUGH ENOUGH? We think so!!
Unlike its sister mkts, Dec Corn & Jan Beans, Dec Wht had a positive outcome following the Nov 9 USDA Report – benefitting from lower US & World Stockpiles! While corn & beans were solidly lower, wht (Chicago, KC & Minn) eked out a 2-3 cent higher close – enabling it to stay in its recent tight trading range! This is good news for the mkt – indicating it may have finally found a price level- competitive on the World Mkt!
The unrelenting “BULL MKT” that commenced in Mid-Aug & extended for $21 (107-128) finally surrendered in early Nov with a sweeping technical key reversal. On Nov 1, Dec Cat peaked out at 128 – but closed just over 124 – posting an outside day down solid demand was victimized by higher prices & the upcoming Thanksgiving Day Holiday (a turkey favorite) – while higher production chugged along! The net result was an $8.00 break (128-120) off the highs – as the mkt searches for a “demand friendly” price level!
Dec Hogs peaked out about the same time as Dec Cat – succumbing to the cattle break, cheap corn & big production –losing $6 (68-62) after rallying $12 (56-58) since late Sept!
- 4th Qtr Production is expected to be a record high – up 5.8% – as well 1st Qtr Prod is also pegged at a record 6.71 BP – up 4.7%!
- The 11/9 crop report predicted corn yields at a record 175.4 B/A – Implying more feeding of hogs in 2018
- Higher prices in late Oct coupled with the impending Thanksgiving Holiday have put the KABASH on demand!
Questions? Ask Bill Moore today at 312-264-4337
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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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