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
The May Bean contract rode the back of easing trade tensions, surprising export sales to Argentina & a friendly supply & demand report to post a 20 cent (1034-1054) weekly gain. Further fueling the rally were Thur export sales of 2.5MMT – a 12 year high!
FACTORS IMPACTING THE MKT
- EXPORTS – Thur sales were 2,464 MMT (900-1.4) –
Mon Inspections were 444,987 (381,191)
11 April 120,000 Argentina
10 April 120,000 Argentina
Noteworthy were Thur sales at 2.5 MMT- the largest in 12 years –
Plus Argentina – of all countries – buying from us
- EASING TRADE TENSIONS – after all the saber-rattling and back-and-forth between China & the US, it appears “cooler heads will prevail” – and that negotiations will supersede any potential trade war – something no one wants!
- APRIL USDA REPORT –
US STOCKPILES – 550 Avg – 570 Ly- 302
WORLD 90 92 96
BRAZIL BEANS 115 115 114
ARG BEANS 40 42 57
- DELAYED PLANTING – It’s already MID-APRIL and not much field work has been done anywhere in the corn & bean belt –due to an unseasonably cold Spring! Still with modern technology & the legendary “producer work ethic”, only a small planting window is needed to complete all the seeding.
Mkt focus is quickly changing from South America drought to US planting progress or lack thereof! Yet, the wintry Spring has not yet got the mkt’s attention. But should it continue, pltg delays are inevitable!
After a stellar 22 cent rally (370-392) in late March, May Corn fell into a consolidation pattern last week – supported by May Beans 20 cent up but pressured by May Whts moisture induced decline. After all the smoke cleared, May Corn surrendered 3 cents for the week – and still sits just 8 cents off its March highs!
FACTORS IMPACTING THE MKT
- EXPORTS – Mon Inspections were a whopping 1,504,697 MMT (1,900,000)
And Thur sales were 886,000 MT (900-1,400)
- USDA REPORT 4/10 REPORT
US STOCKPILES 2,182 avg – 2,192 ly – 2293
WORLD 197.9 197 230
BRAZIL CORN 92 92.2 98.5
ARG CORN 33 33.5 41.5
- TARIFFFS- there for a while, the US/China rhetoric got pretty heated – the sabers were really rattling – but no actual tariffs have been implemented & it now looks like negotiation will stave off any trade war – which would benefit no one!
- PLANTING ON TIME? – probably not – given what so far has been our 4th coldest April ever! But it’s too early to assign a big corn-bean switch to this weather phenomenon the projected 25-35 MMT decrease in S/A corn & bean production over last year has been reasonably dialed in & is in the “rear view mirror”! Going forward, all eyes are on US SPRING PLTG, early “cold weather issues” & down-the-road, any LA NINA induced dryness!
Now you see it – now you don’t! May Wht rallied over 20 cents early-wk then gave it all back late-wk – to close the week unchanged!
- Rains in the extended forecast promised needed relief for the drought-ravaged WW belt
- Record global stocks continued to put a ceiling on any rallies
- US Stockpiles 1069 (exp-1040) & global stocks 271 (exp – 268) – as reported in the USDA 4-10-18 report – simply added to the gut
- Russia wheat exports were raised to 38.5 MMT from 37.5
- US Wht is still not competitive on the world mkt – resulting in mediocre exports
Wht will need help from corn & beans!
Well, we knew tariffs were good for something – they put a low in June Cat on April 4 – with a spike low- sweeping-key-reversal up. A classic with a $5 range, new lows for the move – followed by a close over the previous days high! Not that tariff threats were good news for cattle – it’s just that they surfaced at the end of a $22 down (119-97) – so they created a “bearish exhaustion” low! Still cattle must fight a 10% production increase into the 2nd Qtr & bearish demand weather – to sustain the current rally!
Much like June Cat, June Hogs found a low off the tariff news – this time specifically targeted at pork exports! The mkt felt this news had already been dialed in after a $15 break (86-71) since early January! In addition, SPRING BARBEQUE DEMAND has to be right around the corner, doesn’t it? But acting as a “headwind” against the already $7.00 rally off the April 4 spike low is the gigantic premium ($23) that June Hogs holds to cash!Questions? Ask Bill Moore today at 312-264-4337