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 only positive from Friday’s USDA Report was on the corn side where they reduced the yield to 167.0 (Oct – 168.4) & the World Stockpiles to 296.0 (Oct-302.6)! That was good for a 11 cent inter-day rally! Unfortunately, negative rhetoric from the trade deal curtailed the rally – leaving the mkt with a mid-range close – albeit a marginally higher one!!
FACTORS IMPACTING THE MKT
- EXPORTS – Thur sales were 488,000 (300-650) & Mon inspections were 275,575 (400 – 650)
- HARVEST PROGRESS – corn is 52 % in (lw – 41, avg – 75) Ill – 58 (58) Ind – 57 (77) Iowa – 43 (72) good-to-excellent – 58% (58) – mature -96% (avg -100)
- NOV CROP REPORT – was friendly for all categories
Production – 13,661 (Oct – 13,779)
Yield 167.0 (Oct – 168.4)
Harv Acres 81.8 (Oct – 81.8)
US Stocks 1910 (Oct – 1929)
World Stocks 296.0 (Oct – 302.6)
- US/CHINA TRADE TALKS – the same on-again/off-again nature that has characterized the talks in recent months was prevalent last week – still searching for a venue – Iowa has been mentioned – & still bantering back-and-forth as to tariff-roll-back
- SOUTH AMERICAN COMPETITION – Brazil exported 6.137 mt of corn in Oct – down 6.501 from Sept but up 3.105 mt from last year – corn pltg is at 40.2% (lw-34.6)
- DISMAL EXPORTS – both flagging domestic demand & lackluster exports have been a continual drag on prices!
Two bearish influences will soon be lifted from the market – harvest pressure and the uncertainty of a trade deal – at that time, the mkt should stabilize!!
The USDA Nov Report was not kind to the “bean complex” where #’s were generally left unchanged from Oct when the expectation was quite widespread that re-surveys in selected states would lower the yield & production! Bean Prod was 3530 (Oct – 3550), Yield was 46.9 (Oct – 46.9), World Stocks – 95.4 (Oct – 95.2) & US Stocks – 475 (Oct-460)! The mkt reacted with a 20 cent drop over two days! Furthering the weakness were mixed signals from the US & China on the reduction of tariffs & the ultimate resolution of Phase 1 of the trade deal! Finally, harvest pressure is still on the mkt with 25% of the bean crop out!
Much like the Bean #’s, the Wht #’s on the 11/8/19 USDA Report were unfriendly – with World Stocks at 288.3 (Oct – 287.8) & US Stocks – 1014 (Oct – 1043)! So the mkt reacted with 15 cent down – but nearly recovered all those losses today with a “Turn-around” Tuesday recovery! This type of resilient action is indicative of a mkt that appears to be “sold-out”! And justifiably so- as it sits on the lower end of a 10 year range – which should soon make US Wht competitive on the world mkt!
Pundits keep saying that this mkt is way overdo for a top – that after a $20 rally, it is fairly valued! But “demand” won’t let this mkt die – plus our recent unseasonable cold snap has reduced weight gain & increased death loss – further supporting the mkt! So hang on!!
Dec Hogs continue to be caught between short-term negatives & long-term positives! The former would be heavy supplies & high average weights & the latter would be the massive potential for huge US Pork Exports to China! The two conflicting factors are keeping the mkt range-bound – for now!!
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