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
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