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 USDA Feb Report issued today at 11am was eagerly anticipated by the trade – being the first USDA Report in 2 months! However, the numbers came in neutral and the mkt Kind of “ho-hummed” the report- indicating it’s more interested in the ongoing US/China Trade talks more than anything else!
FACTORS IMPACTING THE MKT
- EXPORTS – Mon Inspections were 975,000 (800-1100) – Thur sales were 1,056 (400-1000)
Mon – 612,000 MT – China
Tues – 2,603,000 MT – China 274,000 MT – Unk
Wed – 182,000 MT – Unk 580,000 MT – China
An impressive array of exports this week with the 8am flash sales adding up to 4.2 MMT – close to the 5 MMT target China had promised
- USDA FEB REPORT
Feb ‘19 Est Range Dec’18
Prod – 4.544 4.490 – 4.592 4.600
Yield – 51.6 51-52 52.1
US Stk 910 800 – 996 955
Global 106.7 109- 122 113
- SOUTH AMERICA – Brazilian Bean Estimates have come in as low as 112 MMT more than 10% under the starting guess at 125 MMT
- OUTSIDES – have been a mixed bag with the US $ coming off a 150 point rally while the crude oil is holding a $12 rally from its Dec lows
- US/CHINA TRADE TALKS – the 4th round commences this coming week in Bejing with resolution hopeful by Mar 1 The mkt, while interested in the Feb 8 USDA Report – seemed to be more focused on the US/China trade talks – closing unchanged for the week after an Up-and-down day!
Mar Corn reacted to a neutral USDA Report with very disappointing technical action with a sweeping key reversal down – making new highs for the week – but closing on a 3 week low – while Mar Beans & wht closed higher. It’s pretty hard to explain – Especially with a stable crude oil mkt. A higher US Dollar was a possible negative!
FACTORS IMPACTING THE MKT
- EXPORTS – Mon Inspections were 901,000 MT (800-1100) – Thur Sales were 503,000 (600-1400)
- USDA FEB REPORT – friendly production & yield #’s were offset by higher than expected US & Global Stocks
Prod 14420 (14.3 – 14.6) 14,626
Yield 176.4 (175.9 -178.5) 178.9
US Stocks 1.753 (1.55 – 1.83) 1.781
Global 309.8 (305 – 311) 307
- CORN STILL THE CHEAPEST ANYWHERE – this will eventually favor excellent exports
The technical action belies a strong fundamental scenario for corn – let’s see what the coming US/China trade talks do to the mkt!
Mar Wht rebounded from a 12-lower close on Thursday by gaining 6 cents Friday “on the back” of a rare Egyptian purchase of US Wht & a friendly winter wheat seedings # from the USDA – 31.3 (31-33)! Still, Mar Wht closed 6 lower on the week! However, US Wht is very competitive on the world mkt – as evidenced by Egypt’s export interest!
Feb Cat continued its impressive upswing which started $10 ago in Mid-Nov (117-127) – undaunted by a “key reversal down” on 1-31-19 & general weakness in the Hog complex! The contract closed within $.50 of its Jan Highs – up $2.00 for the week! The main catalysts for its powerful surge are unrelenting DEMAND & winter storms!
It’s hard to believe the dichotomy between Feb Hog & Feb Cat. Feb Hogs closed lower again – forging new lows – some $15 off its Nov Highs – whereas Feb Cat is only $.50 off its highs – some $10 higher than its Nov lows! The main issue is massive pork production which has totally overcome pork demand – also there is the potential explosiveness of ASIAN SWINE FEVER – which could be wildly bullish later on in 2019 – but which hasn’t kicked in yet!
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