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
Lack of solid exports in the wake of “no trade deal yet” & a perceived Corn-to-beans acreage shift combined to pressure July Beans last week to the tune of a
27 cent down week! Exacerbating the “down” was a very strong dollar that discourages exports! However, the mkt is getting very cheap & has no weather premium in its price so…
FACTORS IMPACTING THE MKT
- EXPORTS – Mon Inspections were 382,298 (lw-476,224) & Thur Inspections were 619,000 (300-700)
- A COLD, WET SPRING – has finally come home to roost as July Corn was only down 4-5 cents while the beans were down 5 times that amount –as planting delays threatened to creep into Mid-May – which of course is far more significant to the mkt than Mid-April!
- CROP RATINGS – beans are 1% in (2018-2%, avg – 2%)
- US DOLLAR – scored new highs-for-the-move last week – further slowing an already slow export pace
- US/CHINA TRADE DEAL is indeed a never- ending saga with many fits & starts nonetheless, it will get done because both countries need it economically & Trump needs it politically – parties are meeting in Bejing this week & Washington DC next week!
- RECORD US & GLOBAL ENDING STOCKS – are acting like an anchor – discouraging or topping out any rallies – however, these onerous stocks
The bean complex is clearly in a downtrend but is cheap enough where going after the short side is a “risky proposition”! Firstly, the July contract is sitting on 8-month lows – which also happen to be 10 year lows! So pushing the short side may be a hazardous undertaking with some bullish probabilities – waiting in the wings! Namely an imminent resolution of the US/China trade deal & ULTIMATE pltg delays – where it becomes too late & wet to plant anything!
From early April on, bullish traders were frustrated by the inability of the mkt to respond to the extreme cold & wet Spring we’ve experienced – in terms of anticipated corn-to-beans shift! Finally, the mkt – late last week – started paying attention to the inclement climes – as July Corn still closed lower but some 9 cents off its lows! Also, a resumption of face-to-face trade talks between the US & China tomorrow was supportive! A trade deal could be more beneficial for corn & ethanol than soybeans – according to export #’s being bandied about in the past few week!
July Wht labored all week under the burden of hefty stocks, a surging US Dollar & Excellent crop conditions! And at one time was down 14 on the week! But corn came to the rescue with a powerful rally last Friday – that spilled over into the wht lifting it to only a 6 cents lower close!
June Cat was ambushed by three main factors: a bearish Cattle-on-Feed Report, a record net long held by funds & good weather for weight gains! The net result was a stunning $7.50 plummet this past week – as the mkt gave back nearly ½ its gains from its May lows from last year! This may be about the extent of the correction – as a trade deal & ASF are still lurking as very positive export potential!
June Hogs basically coat-tailed June Cat down last week as the mkt dropped $8.00 (97-89) in just a few days – a victim of an extreme overbought condition and two negative meat reports – the April Cattle-On-Feed & Cold Storage! With the Asian Swine Fever still very prevalent in China & a trade deal on the verge of being worked out, we’d view this break as a buying opportunity!!
141 W. Jackson Blvd. Suite 1340A, Chicago, IL 60604 | (800) 769-7021 | (855) 264-6673 (Direct) | www.pricegroup.com
A Subsidiary of Price Holdings, Inc. – an Employee Owned Diversified Financial Services Firm. Orders must be entered via direct verbal communication with a representative of our firm. We cannot be held responsible for orders left in any other manner. PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. Investing in futures can involve substantial risk & is not for everyone. Trading foreign exchange also involves a high degree of risk. The leverage created by trading on margin can work against you as well as for you, and losses can exceed your entire investment. Before opening an account and trading, you should seek advice from your advisors as appropriate to ensure that you understand the risks and can withstand the losses. Member NIBA, NFA.
The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or futures. The PRICE Futures Group, its officers, directors, employees, and brokers may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction. Reproduction and/or distribution of any portion of this report are strictly prohibited without the written permission of the author.
To SUBSCRIBE to the AGMASTER please go to http://bit.ly/xIGR6x.
To Unsubscribe from the AGMASTER please send an email to email@example.com.
View the AGMASTER Archives at http://blog.pricegroup.com/tag/agmaster.Questions? Ask Bill Moore today at 312-264-4337