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
May Wht grabbed the spotlight this past week – rallying over 50 cents
From last week’s close – feeding off severe drought in the Western plains! This coupled with
Continued Argentine dryness was more than enough to spark 4 higher consecutive closes for
A 25 cent weekly gain! Even Trumps proposed tariffs weren’t able to stunt the gains!
FACTORS IMPACTING THE MKT
- EXPORTS – Mon Inspections were 990,115 MT (600-1.00) – Thur sales
Were 979,000 (400-700)
Feb 26 132,000 China
Feb 28 250,000 Unk
Mar 1 126,000 Unk
Mar 1 120,000 China
Mar 2 121,000 Unk
Mar 2 198,000 China
- DRYNESS IN ARGENTINA – may have accounted for a 15-20% reduction
In their bean crop – and rain now is too little-too-late
- TRUMPS PROPOSED TARIFFS – of 25% on steel & 10% on aluminum
Are not good news for the grain complex – as they might prompt
Retaliatory measures from our most valued trade partner China –
However, as of yet, this news has not impeded the grain rally
- USDA MARCH REPORT – 3/8/18 –will update US & World Stockpiles
As well as the SA crops
Estimates – US Stocks – 529 MB
Global 95.5 MMT
Brazil Beans 114 MMT
Arg Beans 48 MMT
- THE $64 QUESTION? Will La Nina drought conditions creep into the
Corn & bean belt thru our 2018 planting & growing season
Every year, one can say – if it’s dry at the wrong time, prices will go up –
It’s almost a cliché! But this year, there’s legitimate reason for concern – given what’s happened in Argentine & the US plains states!
May Corn posted a solid 11 cent weekly gain – on the back of weather
Charged gains in Beans & wheat as well as extraordinary export business – US corn is
“far & away” the cheapest on the world mkt – an economic fact not lost on our trading
Partners. So with May Beans up 25 & May wht up 35, May corn was not about to be left behind!
FACTORS IMPACTING THE MKT
- EXPORTS – Mon Inspections were 947,642 MT (1.1 -1.4) –Thur sales
Were 1.75 MMT (1.0-1.4)
Feb 27 130,000MT Unk
- MAR USDA REPORT – 3/8/18 – expectations are for lower stockpiles
Due to exceptional exports & lower Argentine production due to dryness
Estimates – US Stocks – 2.299MB
Global 198.0 MMT
Brazil 91.8 MMT
Arg 36.3 MMT
- LA NINA – dryness in Argentina & the US Plains is taking a toll on the
Corn, bean & wht crops – the Thur USDA 11am report will quantify
Those losses May Corn has had a steady ascent since Mid-Jan – advancing 33 cents (354-387) with nothing more than a 5-6 cent correction! Exports have been exemplary as our partners in world trade easily recognize our corn price as the lowest anywhere. The contract has also been the beneficiary of LA NINA issues in Argentina & The US Great Plains – which has rallied Beans & Wht –spilling over into Corn. And many pundits wonder what’s ahead for our planting & growing season in a La Nina year!
After languishing for 6 weeks in a 30 cent range (450-480), May Wht decided to finally get serious about the drought in the plains states – breaking out from the congestion area for a near-vertical 40 cent upmove – yielding a 36 cent weekly gain!
- The key states good-to-excellent ratings are abysmal –
KS – 12% OK – 4% TX – 4%
- The US Plains aren’t the only problem area – the cold snap in Europe
Has been unkind to their wht crop as well
- Yesterday, Egypt bought 175,000MT of Russia’s wht
The only “fly in the ointment” would be Trump’s proposed tariffs on steel & aluminum.
Since Mid-Feb, April Cat has lost $6.00 (128-122) – $3 of that happened last week as increased production is finally getting the best of demand
- For several months, the cattle-on-feed reports have indicated more
Placements than a year ago
- Beef production in the 1st Qtr is 4.3% over last year & for the 2nd Qtr
Projected at 12% over last year
- Consumer confidence is at multi-year highs & continues to be a
“MAJOR FRIEND” to beef consumption however, beef demand has been so strong that the current break might be short-lived!
Last week, April Hogs had a violent down week – losing $3.00 – but most of it in one day – last Thur – when the mkt gaped lower & closed nearly limit-down! The issues are the same as with cattle – too much production yet at the same time – very strong demand! After last Thur’s debacle, however, the mkt was unable to follow thru down – As it was already some $10 off its Jan highs! Solid demand & winter storms seem to intervene & stop the bleeding!
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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