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 perfect storm continues with trade tariffs rocking “demand” & perfect growing conditions implying inflated supply. The result is a mkt – that even though just over a 10 year low & grossly oversold – is having a hard time sustaining any rallies! Any trade resolution or harsh weather could turn this mkt quickly – a rallying crude & maybe toppy $ would help!!
FACTORS IMPACTING THE MKT
- EXPORTS – Mon Inspections were 849, 204 MT (515,711) – Thur sales were 1.000 MMT (500 -900)
28 June 130,632 Mexico
25 June 186,000 Unk
13 June 179,000 Unk
04 June 114,300 Mexico
- CROP RATINGS – dropped a couple of % points (73-71) but remains over 70 % – very lofty for this time of the year – blooming 27% (13)
Ill – 78 (78) Ind – 72 (71) Iowa – 76 (79)
- USDA 6/29 FRIDAY ACREAGE & QTLY STOCKS – the numbers were a little friendly but beans had a hard time following Corn & Wht’s lead higher
Qtly Stocks -1.222 (exp-1.225 March – 2.107)
Acres – 89.557 (avg – 89.691 Mar – 88.98 LY – 90.142)
- OUTSIDES – Crude has rallied $12 in 12 days – positive for meal demand – the US Dollar is acting toppy – a higher crude & a lower dollar would be more than welcome – given all the other negatives beans have had to negotiate 10 YEAR LOWS – wow – how did that happen? Well a big crop & trade tariffs will do it every time! Doom & gloom for sure! However, a bumper crop isn’t yet in the bin and there’s still a chance trade woes will be resolved!
There was a glimmer of hope for the Bulls last Friday – late/day – when July Corn was double-digits higher – but alas the mkt faded to a 5-higher close and then got buried on Monday! The July 6 tariff deadline looms over the mkt & the the nascent crop is looking very good with crop ratings over 70% – but it’s always darkest before the dawn!!
FACTORS IMPACTING THE MKT
- EXPORTS – Mon Inspections were 1.537 MMT (1.540) & Thur Sales were 1.486 MMT (800 – 1.4)
22 June 117,00 Panama
- June 131,300 Mexico
12 June 152,000 Mexico
- CROP RATINGS – are remarkably high for this time of the year – 76%(77)
Ill – 85 (83) Ind – 76 (76) Iowa – 78 (81)
- JUNE 29 USDA REPORT – both stocks & acreage came in over estimates but still the futures managed to get 10 cents higher – temporarily!
Qtly Stocks – 5.306 (avg – 5.268 March – 8.888
Acres 89.128 (avg – 88.562 LY – 90.167)
A lot of bearish news has been dialed into the price structure from trade issues and bumper crop prospects – but neither fundamental is a “done deal” – & both remain very fluid! The crop isn’t made & a trade agreement could be resurrected! Look for some kind of Bullish Divergence to confirm a seasonal low!
Last Friday’s USDA Acreage & Qtly Stocks Report may have put a low in the Wht mkt – as July Wht closed up nearly 20 cents – despite higher stocks & acreage #’s! The following Monday, the mkt retreated – along with corn & beans –but, unlike them, did not retest its lows! And today was a double-digit up-day –with July Wht closing some 25 cents Os its June lows! Also contributing to this turn-around are global wheat production issues in the Black Sea, Russia, Australia, & Canada!
Aug Cat was tested in the month of June by both Mother Nature & the USDA – and came thru with flying colors both times. First were consecutive Friday USDA Reports – a Cattle-on-Feed Report June 22 & a Qtly Pig Crop June 29 – both bearish – continuing the trend of higher production! However, by month’s end, the Aug Cat contract had shaken off the bearish supply news & closed up $3.00 for the month! Additionally, 105 degree heat indexes from last W/E – can’t be good for demand, yet this week, Aug Cat is up for the week! This is solid Bullish Divergence – indicating that Aug Cattle is leaning higher!!
Bill MooreQuestions? Ask Bill Moore today at 312-264-4337