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
Exports really are a good thing – RIGHT? You certainly wouldn’t know it from the Market’s action the past two weeks! Once again, the mkt disregarded great export #’s – Choosing instead to focus on the negatives improving S/A growing weather, record global Stocks, a $6.00 drop in crude & a 1600 point hit in the DJI! We indeed don’t trade in a vacuum.
1)EXPORTS – Mon Inspections were 974,876 (600-900) & Thur sales were 2.963 (2.0 – 2.5) – an amazing # but already built in to the price
19 Dec – 1,199,000 China
20 Dec – 257,000 Unk
100,000 Columbia (meal)
21 Dec 115,500 Unk
An impressive array of exports victimized by a “buy-the-rumor-sell-the-fact”
Mentality – resulting in a weekly loss of 16 cents!
2)DEC USDA REPORT – was a “ho-hum” report with slightly negative carry-out
& no yield or production – Nov was 52.1 & 4,600 – final #’s in January
3)MACRO MKTS & EVENTS – first of all, the HOLIDAY MKTS are in full bloom –
Meaning low volume & exaggerated mkt moves – Secondly, a possible
“govt shutdown” threatens the timely dissemination of info from the USDA –
And finally the “outsides” are certainly creating a “risk-off’ trading environment
With steep losses in the Crude Oil & Stock Mkt!
4)SOUTH AMERICAN WEATHER –has certainly improved in recent weeks –suggesting possible record crops in Brazil & Argentina
5)TRADE PROGRESS – maybe doesn’t measure up to the positive rhetoric circulating
a few weeks ago but nonetheless, exports are starting to flow to China once again
a very good thing!!
6)TECHNICALS – Jan Beans went negative for the month Friday – certainly
Disappointing action – given all the positives we’ve seen since the G-20 meeting
The first W/E in Dec – then again, much of the rally leading up to the summit
Was in anticipation of positive trade news!
“BUY THE RUMOR – SELL THE FACT” & negative macros sabotaged the grain
Complex this week – when very impressive exports should have yielded much better mkt
Action! But ultimately EXPORTS ARE A GOOD THING!!
Amidst all the disappointing mkt action this week off extremely robust exports,
Comes Fridays encouraging price activity –with Mar Corn closing 3 cents higher while
Mar Beans & Wht both finished a dime lower! The mkt was supported by the HOPE that
China would be in the mkt for 3 MMT of our corn in January – and WHY NOT – as US Corn
Is the cheapest anywhere in the world!!
FACTORS IMPACTING THE MKT
1)EXPORTS – Mon Inspections were 885, 060 (800-1.1) &
Thur Sales were 2.5 (2.0-2.3)
20 Dec 426,800 – Mexico
21 Dec 222,504 – Unk
2)DEC USDA REPORT – only stocks –pretty neutral –
Nov Prod – 14,626 Yield -178.9 – final #’s in Jan –
Most probably lower – as the last 10-20% of harvest normally Takes a hit
3)CHART GAP FILLED – the 2 cent gap left after the G-20 Summit was filled
Decisively on Thur after Mar Corn capitulated following the best Thur Sales
In recent memory
4)CHINA – has hinted at buying large quantities of our corn in Jan –
Maybe upwards of 3MMT with 5-7 more – down the road!
5)CRUDE OIL – from Oct 1 until today, Crude has lost 40% (76-45) – that’s a
Gargantuan loss in such a short period of time for any commodity – and it has
Weighed heavily on ethanol demand
6)US DOLLAR – stubbornly clings to its 3-month 400 point rally – this wk, the
Mkt broke hard on Thur – only to regain all its losses on Fri – of course, a
Strong dollar is a deterrent to exports
So where would be if the G-20 Summit had been a “big bust”? My point is
We’ll take any & all exports – however the mkt chooses to process them –knowing that
Eventually, they’ll help to whittle our carry-out!!
Much like its sister mkts, Mar Wht had a tough week – losing 16 cents (530-514)!
Not only did it have to deal with the mid-wk collapse of Corn & beans, but as well, with
The unwelcome news that Russia’s Ministry of Agriculture will increase grain exports to
42 MMT – an unexpected move – given the growing tightness of Russian wht supplies. Also
Russia announced it DOES NOT PLAN to curb its grain exports!
Needless to say, all commodities “were up against it” this week with plummeting
Crude oil & Stock mkts as a backdrop! Coupled with that were adequate supplies, bearish
Weather, negative USDA Reports (Cattle-on-Feed, Pig Crop & Cold Storage) and finally down
Grain & hog mkts! But Feb cattle was able to shake-off all of that – finishing on the plus-side
For the week – on the back of STRONG PACKER DEMAND!!
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