AgMaster Report 05/01/2024

JULY WHEAT

After a near-vertical 80 cent, 6-day rally, July Wht became severely over-bought & is predictably correcting today -with the fundamental attached to the correction expected rain in S Russia! Indeed, dryness in the South US Plains, Russia & Ukraine spawned the rally – along with historical cheapness & export potential uncovered by low prices! As well, pressure from first Notice Day Tues & Crop Progress today at 3pm added to the price pressure! Spring Wht is expected to be 36-38% in & the WW good-to-excellent to decline 2-3 %!

 

JULY CORN

As you can see, July Corn has been locked in a tight 25 cent range since Mar 1! Today, the headwinds of heavy deliveries (beans, oil & wht) & better than expected planting progress – 27% (avg-22) have the mkt under pressure! But supporting the mkt are the tailwinds of exceptional exports (35% over 2023) & possible pltg delays ahead which would shift corn acres to beans! As well, the general cheapness of corn ($2.00 under last Summer’s highs) & the strong possibility of La Nina’s hot & dry coming – has the mkt leaning up – albeit still range-bound!  And there still exists a sizeable short fund OI! There appears to be “no margin for error” for the US Crops this summer!

 

JULY BEANS

Massive deliveries against the bean complex – oil (1873), beans (537) & meal (222) & impressive planting progress – 18% (10-avg) have July Beans on their heels today!  Illinois is 26% in & Iowa 25% in! As well, expected planting delays this week could add to the already sizeable bean acreage! Finally, the ongoing Argentine oilseed & maritime workers strike is adding to the pressure! The Monday inspections showed 250,332MT – cumulative is running 18% under 2023! However, the $2.50 break in July Beans since December is substantial & has dialed in a lot of bearish fundamentals! Plus, the wide disparity between Conab (46mmt) & the USDA (55mmt) regarding Brazil’s crop would seems to resolve itself closer to CONAB than the USDA!

 

JUNE CAT

After topping out at 186 in Mid-March due to the bearish Cattle-on-Feed Report, June Cat plummeted $16 to 170! The latter part of the down move was exacerbated by the Bird Flu epidemic which has alternately been down-played but then feared as it relates to beef demand! And it’s still a relevant mkt-mover – rearing its ugly head anytime the cattle mounts a rally! Heavy weights & higher US beef production have been offset by resurgent beef demand from the ongoing “grilling season”! The net result is a once powerful bull mkt that has morphed into a consolidating, sideways trade

 

JUNE HOGS

The April 10 Key Reversal remains the major chart formation of June Hogs for 2024 as the mkt has not breached that high since! Coinciding with this “chart top” was the emergence of Bird Flu in the Midwest – which cast serious doubt over meat demand & has acted like a “wet blanket” on any subsequent rallies! As well, weaker cash & a near-record long-fund open interest has been significant headwinds to June Hogs – staving off any potential rallies! Underpining the mkt is the stellar “grilling season” demand! The net is a range-bound mkt between 101 & 108!

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