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
A confluence of contrasting fundamentals has descended upon the corn mkt – creating a highly volatile mkt environment. First, the USDA incredulously raised the corn yield to 168.4 (Sept – 168.2) – even with only 15% of the harvest in! Second, a partial US/China deal seems likely – & third a major storm is headed our way – the result dn 14 up 14 -to unchanged!
FACTORS IMPACTING THE MKT
- EXPORTS – Thur sales were 284,000 (500-800) & Mon Inspections were 466,000 (500-700)
Mon – 240,000 to Unknown
198,000 to China
Thur – 398,000 to China
- US/CHINA TRADE DEAL – the headlines this week have been “all over the map” – starting with blacklisting Chinese companies – then a partial deal – then – China leaving DC a day early because of the “wide divide’ between both countries – to finally Trump & the China VP meeting in DC today for high-level talks! After what’s gone down in the past, it’s hard to trust any trade deal – partial or
Otherwise- but we remain hopeful!
- OCT USDA REPORT – the USDA has resumed their penchant for issuing bearish reports – raising their yield – 168.4 (166.8)), production 13,779 (13,611), US Stocks 1929 (1684) & World Stocks 302.6 (296.1)
- MAJOR WINTER STORM – is hitting the far NW Corn Belt – promising to end the growing season for those crops – however, it remains to be seen if this is a big enough area to really impact overall production
- HARVEST PROGRESS – corn is 14% in (lw-7 avg – 34) dented 93 (99) mature 58 (85) Good-to-excellent – 56 (57)
Ill 13 (46) Ind 15 (29) Iowa 3 (12) Ohio 11 (17) – harvest results
- CHARTS – higher lows & higher highs since Mid-Sept – filled a long-standing downside gap from early Aug 387-392) – good technical action which indicates the harvest lows are already in!
We’ve taken the “DOWN” out of the mkt! That leaves sideways or up! And that will be determined by the ongoing yield results and the trade talks! Our choice would be UP – given the historical cheapness of corn prices today (lower 20% of a 10-year range)!!
Well they say a picture is worth a 1000 words -and this chart “speaks volumes”! Easily the bullish stalwart of the grain complex, Nov Beans are not too far from their June highs – whereas Dec Corn & Dec Wht are miles away from theirs! While the USDA Oct Crop report was a bearish surprise for corn, it was in fact friendly – across the board – for beans – yield – 46.9 (47.1) Production – 3550 (3571) US Stocks – 460 (510) – World Stocks – 95.2 (96.9)! So that coupled with the imminent Winter Storm & a likely “partial trade deal” has Nov Beans up 16 cents for the wk! Ongoing yields will determine the extent of the rally.
A rising tide floats all boats & so it is with the Wht Mkt! Whereas it does respond to various supply/demand fundamentals – like the Russian Wht Crop, Egyptian tenders & the condition of the Winter Wheat Crop, the movement of its Sister Mkts – corn & beans- has the biggest influence on its mkt action -so this week rallying C & B has spilled over into the Wht – pushing it thru its August highs today!!
The mkt has made a near-vertical move since early Sept (98-112) when it put in a spike low! Although overbought of late, strong cash & solid demand has underpinned this mkt! Another assist would be the Hog Mkt – buoyed recently by positive trade talk in DC! Also, it turns out, the packing house fire – while initially considered bearish, has contributed to the turn-around – effectively reducing the overall meat supply!
The Dec Hog Contract is closely aligned with the progress of the US/China Trade talks – and today, all indications are a “partial trade deal” will get done! This should mean a big increase in our pork exports to China! On top of that, hog futures have been buoyed by China’s sharp advance in pig prices, strong packer demand & just this week a record US Pork Purchase by China for 2020! All this contributed to a solid weekly gain by Dec Hogs Of $2.65 (67.25-69.85)!
141 W. Jackson Blvd. Suite 1920 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 firstname.lastname@example.org.
View the AGMASTER Archives at http://blog.pricegroup.com/tag/agmaster.Questions? Ask Bill Moore today at 312-264-4337