About The Author

Bill Moore

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 BEANS

A perfect storm descended upon the Bean Complex yesterday – in the form of rains in Argentina & the Plains, fears of a China Trade war & a bulky open interest!  It all resulted in a predictable downside flush-out of 23 cents- giving May Beans their lowest close since Mid-Feb!

FACTORS IMPACTING THE MKT

  • EXPORTS – Mon Inspections were 490, 536 (700 – 1050) – Thur sales were an impressive 1.347 (800-1.200)

Mar 16         20,000           Oil            Unk

9       183,000          Beans       China

9        205,000                           Unk

6        120,000                           China

198,000                           Unk

2         121,000                          Unk

2           20,000         Oil            Unk

  • RAIN IN ARGENTINA – got the mkts attention over the W/E- but many

Feel now it’s too little too late

  • RAIN IN THE PLAINS – got wheat’s attention & spilled over into

The beans – we’ll have to wait until post-dormancy to see how bad

The Winter Wheat Crop was affected

  • CHINA TRADE WAR FEARS – with talk that President Trump is preparing

$30-60 billions of trade tariffs against China – the mkt understandably

Retracted – as China is our biggest trading partner

  • A SIZEABLE LONG OPEN INTEREST – is hanging over the grain complex –

Threatening a large liquidation – should a trade war materialize

  • MACRO MKT IMPACT – yesterday, big down days in the stock mkt & crude oil spilled over into the grains with the all-important Mar 29 Acreage & Qtly Stocks Report just 9 days away, focus will be shifting from S/A  crops to US planting –with the $64 question lingering – Will La Nina impact our corn & beans thru the pltg & growing season?

MAY CORN

Last Thur, Corn Inspections came in at a 23 year high  but the mkt couldn’t hold a rally – closing lower – and since then has lost 12 cents!  I should have seen it coming – after all my years in the business!  Too much good news put in a temporary top – especially with the Thur Mar 29 USDA  Report looming!

FACTORS IMPACTING THE MKT

  • EXPORTS – Mon Inspections were 1,409,281 (1.2 – 1.5) – Thur sales were 2.605,000 (1.3 – 1.7) – a 23 year high!

Mar  20            110,000           Corn              Peru

19             115,000                                 Unk

206,000                                 Japan

13             210,000                                  S Korea

12             107,752                                  Japan

254,000                                  Unk

9              260,000                                  Unk

8              110,000                                  Japan

  • TRADE WAR JITTERS – especially has the corn mkt’s attention – as it has been riding  the back of extraordinary exports all year
  • TOO MUCH HEAVEN- after a 40 cent rally since Mid-Jan, corn was prime for a correction & near record exports provided the perfect “TIPPING POINT” going forward, we may see consolidation before the acreage report & the 3-day Easter W/E!
  • TECHNICAL SUPPORT – the May Corn Contract corrected 50% of its Jan-Mar run-up (354-394) & this may hold it going into the major USDA Report next Thur – just before Easter W/E!

South America is slipping into the “rear view mirror” as US planting is less than a month away & will assume center-stage!  We don’t see a major trade war with China!  Trump is definitely pro-business & he knows grain prices are on 10 year lows – so we don’t think he wants to jeopardize  AGRICULTURE by reducing our exports!

MAY WHEAT

May Wheat had a tough week – losing 40 cents since its Mar 9  close – mainly due to a wetter forecast for the plains states – the last two days were “straight down” – in fact yesterday, KC May Wht was limit-down!

  • However, the G/Ex ratings belie the weather forecasts

KS – 11(12)         OK – 5(7)      TX –  10 (13)

  • Rain in Argentina also contributed to the bean’s collapse – which spilled over to the wht
  • Weak Demand for US wheat – continues to undermine the mkt
  • Cold temps in Europe might jeopardize the crops in France, Germy & Poland
  • Russian Wht Exports were increased to 38 MMT (prev- 36.8)

The jury is as to how much damage WW suffered – post-dormancy will tell!

APRIL CATTLE

For the longest time, demand was able to keep pace with an ever-burgeoning supply – but around Mid-Feb, “BIG D” started losing the battle.  Nothing was more telling than last week’s USDA Report – putting 2nd Qtr Beef Production 12.8% higher than last year – with a jump of 745 MP from the 1st Qtr – the biggest Qtr-to-Qtr jump ever!  The mkt reacted accordingly – losing almost $4.00 since Mar 9.  An imminent trade war also did the mkt no favors – implying less exports.  We’ll get an update on this Friday’s March Cattle-on-Feed!

APRIL HOGS

Much like Apl Cat, Apl Hogs have fallen victim to burdensome supply – which has triggered a $5 break (68-63) since last Friday!

  • Hefty weights & active daily slaughter have exerted down pressure
  • The 1st to 2nd Qtr decline in pork production is the smallest in 12 years
  • The likelihood of a trade war bodes ill for pork exports
  • Thursday’s Cold Storage Report – 2pm – will update pork inventories

Apl  Hogs are $14 off its Jan highs – searching for “DEMAND” – hoping that the Easter season will be the answer!

Thanks,

Bill Moore

Questions? Ask Bill Moore today at 312-264-4337

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Questions? Ask Bill Moore today at 312-264-4337