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
Needless to say, this W/E has the feel of a major report! The political rhetoric. In front of the G-20 meeting has been all over the map but the mkt appears to be quite Sanguine the “arrows are pointing up” – with Jan Beans closing on 6-wk highs! If logic still counts, I’d say a resolution is imminent – Trump’s economy dearly needs it & he knows it!
FACTORS IMPACTING THE MKT
- EXPORTS – Mon Inspections were 1,105 (600-1,200) & Thur Inspections were 628,000 (400-900)
30 Nov 120,000 Unk
28 Nov 268,748 Unk
23 Nov 120,00 Unk
20 Nov 123,567 Unk
16 Nov 100,000 Unk
14 Nov 148,000 Unk
13 Nov 276,732 Unk
- HARVEST PROGRESS – it’s over – 94 (lw – 91 avg- 98)
Ill – 100 ( 100) Ind – 95 (98) Iowa – 98 (100)
But a caveat – as some of my producer customers are still at it due to inclement weather!
- NEXT USDA REPORT JAN – I’m guessing the numbers will be coming lower than Nov – 4600 – 52.1 – typically, the last 15-20% of harvest is not the best – as weather takes its toll
- G-20 SUMMIT IN ARGENTINA – this kind of reminds us of the boy “who cried wolf once too often” – yes we’ve heard many times before that resolution is imminent – but this time, there’s traction! The stock mkt has taken a hit due to disappointing tech stocks, rising interest rates, big lay-offs announced by GM & indeed the Tariffs – & the economy has been “Trumps Crown Jewel” – he needs to give it a boost & a trade deal would do just that – maybe not signed, sealed & delivered Monday morning but soon!
- OUTSIDE MKTS – as we’ve said before, they have not been the mkt’s. Friend but the sheer fact the grains have held a tight range while the US Dollar has rallied & the Crude has lost 35% of its value – displays resilient bullish divergence!
The trade snafu with China is hurting them & us – and they finally both. Realize it! So a resolution makes a lot of sense – but as we all know – politics doesn’t always heed logic & good sense – let’s hope this time, it does!!
Why the mkt with the strongest fundamentals has been the laggard – of late – is mystery to us! Crude Oil’s free fall has certainly done Corn no favors! But the simple fact that US Corn is the cheapest in the world – will go a long way in fortifying its much-needed exports! We seldom recommend “trading price” but “10 year low” price levels can’t be ignored!
FACTORS IMPACTING THE MKT
- EXPORTS – Mon Inspections were 1,117 (700-1,100) & Thur Sales were 1,270 (400-950)
23 Nov 132,000 S Korea
19 Nov 138,000 S Korea
14 Nov 212,000 Mexico
05 Nov 101,745 Mexico
- HARVEST PROGRESS – 94% in (lw – 90 avg – 96) – Ill – 100 (99) Ind – 95 (96) Iowa – 96 (97)
- DECLINING YIELDS FOR THE JAN REPORT– the decline in the Nov Report – 178.9 (180.7) was surprising & this trend will most certainly continue in the Jan Final #’s – as early winter weather has hurt the yields of the corn still out
- TRADE RESOLUTION – of course all eyes on the G-20 Summit this W/E in Buenos Aires – the fact that the NAFTA pact with Canada & Mexico was finalized yesterday bodes well for progress with the US/China deal.
- CRUDE OIL – the shocking $25 drop in just a month’s time could well be unprecedented in modern times – the good news is that corn didn’t follow crude down but stayed in a tight range
10 year lows, stellar exports & a trade deal SHOULD BE a recipe for Higher prices – we’ll see!!
Dec wht paid scant attention to its own fundamentals and reserved the LIONS SHARE to corn & beans & the impending trade deal – and justifiably so! Bearish Global acreage news, Russian/Ukraine conflicts & occasional Egyptian tenders for US wheat are all worthy news items but the real mkt maker is the 800 pound Gorilla that is the US/China trade deal – to wit, Friday’s action where a general mkt optimism over the upcoming G-20 Summit buoyed the entire grain complex – not the least of which was Dec Wht which rallied 18 cents to a 3-wk high!!
Dec cat experienced a volatile week – being down $1.50 early Thur and up $.50 early yesterday – before closing the wk – basically unchanged! So the positives –very strong consumer demand & a potential trade deal – were exactly offset by the negatives a record supply of pork/poultry, a premium to cash & a demand-deterring early Winter Storm!
Trading the hog mkt is tricky proposition – kind of like “waiting for the other shoe to drop”! Mainly due to the fact that we’re dealing with a potentially massive bullish influence that is AFRICAN SWINE FLU – an insidious disease currently afflicting the China Hog Herd – which is both incurable & very contagious! But the expected prodigious pork imports by China have not begin but most certainly will – starting in early 2019! Meanwhile, Dec Hog’s current premium to cash & record pork production precipitated a healthy $4.00 correction off the highs – but the shorts are reluctant to get over-zealous about the downside!
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