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
In the past 6 trading days, Mar Beans have exploded for a 60 cent gain (low to high)
Making new contract highs along the way! The main catalyst has been Argentina weather –
Too dry & too hot – which has steadily ratcheted down the crop estimate of Argentine Beans.
This sudden upside move is all the more impressive – in light of very lackluster exports!
FACTORS IMPACTING THE MKT
1) EXPORTS – Tues Inspections were 960,000 MT (750-1.100) –Thur sales
Were 837,000 MT (450-750)
Feb 16 Bean Oil 28,000 S. Korea
Feb 12 Beans 198,000 Unk
Feb 5 116,000 Unk
Feb 2 Beans 108,860 Beans
2) USDA FEB 8 REPORT – this report was the first “tip off” that Beans
Were sold out & ripe for a turn-around- US Stockpiles come in at
530 MB (Est -492) but the mkt was able to slough off this unfriendly #
And close higher!
3) SOUTH AMERICA – for sure Argentina has been the culprit with dry conditions extending to as much as 50% of the growing area – Brazil on the other hand
Has received plenty of moisture – but the “net effect” is still projected to be
A 13-15 MMT deficit over 2017!
4) OUTSIDE MKTS – are on our side for a change – the US Dollar is on a 3 year low
Crude has rallied as much as 50 % since Mid-June – both good for export demand & suggesting a little inflation is creeping in!
5) LACKLUSTER EXPORTS – week after week, they’ve been below last years pace – but with the deterioration of the Argentine crop, they should improve
6) MEAL IS THE UPSIDE LEADER – this is always a good sign for any up-move
in the grain complex
The Bean mkt is getting a lot of traction out of a “little bit of good news in
Argentina” – it’s dry there but by no means is it a full-blown drought! This bodes well for the
Bean complex with La Nina lurking ahead of the all-important US planting & growing season!
The “800 pound gorilla in the room” is clearly the Argentine weather woes &
Its crop-reducing impact on the Argentine Bean Crop. March Beans & March Meal responded
In kind – both scoring new contract highs. And Mar Corn trailed along as the weak sister –
Gaining only 2 ½ cents! However, to its credit, it has gained 24 cents since Mid-Jan – due in
Large part to corn’s price as the cheapest on the world mkt – accounting for its very robust
Exports- week after week!
FACTORS IMPACTING THE MKT
- EXPORTS – Tues Inspections were 938,000 (800-1000) mt & Thur sales
Were a whopping 2.071 mmt ( 1.0 – 1.5)
Feb 16 116,000 mt Japan
Feb 14 123,000 mt Unk
Feb 6 120,000 mt Japan
Feb 6 105,000 mt Unk
Feb 5 130,000 mt S Korea
Feb 2 195,000 mt Unk
Feb 2 170,000 mt Egypt
- FEB 8 USDA REPORT – all estimates were lower than expected –
US & GLOBAL STOCKS and BRAZIL & ARG CROPS – reflecting great export
Demand & S/A weather issues
- US $ & CRUDE – of course a lower US Dollar is very beneficial to our exports –
Which has been validated every week – and a higher crude is good for ethanol
Demand & suggests inflation
- LA NINA – this is not a MYTH – its real – from the dryness in Argentina to the
Dryness in our Winter Wheat Belt – it doesn’t take a lot of imagination to
Appreciate its impact on our 10 year low prices – should it rear its
Ugly head during planting & growing season
They say “a rising tide floats all boats” & that was certainly the case this past
Week as Bean’s 40 cent rally lifted corn – but corn is no slouch with 10 year low prices
& solid exports!
Mar Wht has had an impressive 55 cent run since Mid-Jan (412 – 467) – but
Has recently showed signs of stalling out –especially after today’s actions – which had
REVERSAL written all over it! After coming within 4 cents of last week’s high, Mar Wht
Had a sweeping turn-around –breaking inter-day 13 cents & closing under last week’s lows!
The mkt has been feeding off
- Drought like conditions in Kansas & Oklahoma – the key WW states
- Strong rallies in Beans & corn
- A competitive price in the world mkt & a cheap $$ – leading to
Feb Cat is “between a rock and a hard place” with burgeoning supplies
Being offset by robust! It’s been a real head-scratcher – but maybe today’s action will
Add clarity – with the mkt currently down $2.40! The $13 run since early Jan (117-130)
Has been impressive
- 1st Qtr beef Production is expected to be 4.3% above last year –
2nd Qtr beef production is forecast up 12% over 2017
- The consumer confidence is at a multi-year high
- With big supply ahead, April Cattle seems unwilling to build a premium to cash
With Feb Hogs losing $1.50 last week (74.75 – 73.25), while Feb Cat
Gained almost $4.00, the hog mkt may be telling us – it has topped out – finally succumbing
To burdensome supplies! The surging stock mkt & the stiff discount of April Hogs to cash
Suggested more up – but it may not happen!
Questions? Ask Bill Moore today at 312-264-4337
A Subsidiary of Price Holdings, Inc. – a 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. ©2018
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