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
Since early Oct, Jan Beans have been range bound (965-1010) with robust Chinese demand & a lower US Dollar doing battle with the US harvest & early S/A growing weather! But now with the US Harvest in the rear-view mirror, the mkt was able to push to the top of the range off pesky dryness in Argentina & S. Brazil!
FACTORS IMPACTING THE MKT
- EXPORTS – Mon Inspections were 1.80 MMT (1.2 – 1.5) – Thur sales Were 942,000 (800 – 1,200)
Nov 30 – 132,000 MT – Unk
Nov 30 – 525,000 MT – China
Nov 29 – 263,000 Mt – China
Nov 21 – 130,000 MT – UNK
Nov 13 – 135,000 MT – Phil
- NOV CROP REPORT
Production – 4.425 BB (est – 4.406, ly – 4.431)
Yield 49.5 B/A (est – 49.2, ly – 49.9)
- SOUTH AMERICA –not enough rain over the W/E & very little forecast Between now & Mid-Dec – has the mkt leaning upward – continued Moisture deficits after 12-15 would start to lead to yield losses
- US DOLLAR – is still 8-9% off its Jan Highs – despite a recent 300 point Upside correction – & this should bode well for our exports!
- CRUDE OIL – has rallied 35% since Mid-June (43-59) –which is both inflationary & friendly for ethanol demand!
Previous plus $10.00 rallies in Oct & Nov have been short-lived! We need sustained action over the $10.00 mark to mount an upside charge!
Despite almost 4000 deliveries against the Dec Corn contract, The Mar contract staged a weekly reversal – with its highest weekly close in 3 weeks! Unfortunately, today the mkt couldn’t follow thru losing 5 cents! Farmer selling both in the US & S/A was the culprit!
FACTORS IMPACTING THE MKT
- EXPORTS – Mon Inspections were 586,000 MT (700-1,000) – Thur sales Were 599,000MT (700-1.000)
Nov 29 – 101,600 MT Unk
Nov 14 – 133,086 MT Unk
- NOV CROP REPORT
PRODUCTION – 14,578 BB (est – 14,323, ly – 15,148)
YIELD – 175.4 b/a (est – 172.3, ly – 174.6)
This was a bearish surprise – many feel the final #’s in Jan Will not measure up to these!
- HEAVY DELIVERIES AGAINST DEC CORN – now up to 3760 contracts – but The mkt is holding thanks to the strength in its” sister mkt” soybeans
- SOUTH AMERICA CORN PRODUCTION – Argentine corn planting is Unchanged from last year but total Brazil Production is estimated At 90.5MMT- well down from LY’s 98.5. Dryness is S. Brazil & Argentina Could easily reduce those #’s
- CHINA – the feed mills are rumored to have bought another 4 cargoes Of corn in recent days! That brings the total to 13 for the past month
- ETHANOL QUOTAS – were maintained at the status quo – at last years Level – which disappointed the trade
Dryness in South America should be friendlier to corn than beans – as corn down there – is pollinating now! But strangely, Beans are currently the upside leader! Chinese export interest & dryness in Argentina will go a long way in replacing corn’s massive stockpiles!
Mar Wht has stayed in a tight range (430-450) since early Nov! The biggest negative has been a record Russia wht crop – which has translated into record exports.
- Sister mkts Jan Bean & Mar Corn have been sideways as well & Wht needs their upside help
- Winter Whts gd/ex conditions continue to wane – helping to support The Mar wht contract
- Egypt is currently tendering for a Jan 11-20 shipment – Russia & Romani Seem to be the main beneficiaries – the US is not involved but a “rising tide floats all boats”!
- Cumulative wht sales are at 63% (avg – 67)
After a sterling upside run this past Fall (110-132) – off solid demand & despite increasing supplies, Feb Cat peaked in early Nov – only to correct ½ its gains – going into the Thanksgiving holiday!
In spite of the solid demand implications of a record high stock mkt & an expected near record decline in beef production from the 4th to the 1st Qtr, the mkt is struggling at a 50% correction level – which traditionally supports the mkt!
Since mid-Nov, while Feb Cat has dropped $5 (126-121), Feb Hogs have rallied $5 (66-72)!
- The Thanksgiving meal demand spilled over from turkey to pork – But not beef
- There’s plenty of optimism about China importing US Pork – yet Short-term demand is still sluggish
- A slow slaughter pace in Nov caused producers to hold back on marketings
- A very strong demand tone has the uptrend intact & technicals looking good
- However, with a hefty net long of 63,561 contracts, a cautionary tone Is advised
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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