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 confluence of the June 30 USDA Report & hot & dry weather was more than enough to awaken a dormant bean mkt – rousting it from a 3-month range to its highest close since early March! The good-to-excellent rating stayed at 71% but in Illinois dropped 6% to 63%! Bean inspections today were 521,000 MT but an impressive 1.083 MMT last Thur! with the mkt sitting on 10 year lows with no weather premium before last week, it was prime for a rally – just needing the proper catalysts – and it got them! Going forward, the mkt is awaiting further clarity on the latter July weather forecasts! The Macros continue to support with the DJI maintaining its 8000 point rally since Spring & the US $ 800 points off its highs!
A plethora of positive export news today enabled Sept Corn to extend last weeks gains – including inspections of 962,000 MT & two 8AM export announcements – 182,000 MT to Mexico & 202,000 to China! All told, the mkt was able to muster a 40 cent rally (315-355) since the USDA’s bullish acreage prediction – dropping corn acres from 97MA to 92MA! Then on the heels of the report, hot & dry weather arrived further fueling the up! This afternoon the gd/ex rating dropped to 71% (lw-73)! Sept Corn reached its highest levels since early April but is still relatively cheap – just coming off 10 year lows & still being $1.00 off its contract highs from last summer! The mkt would like continued export demand & “H & D” weather to continue is upward surge & will probably receive both!
Sept Wheat continues to play the “weak sister” benefiting more from spill-over from Corn & Beans resurgence than from its own fundamentals! An active winter wheat harvest – 56% in & expected record world stocks have provided formidable headwinds to any wheat rallies – although last week with a big assist from corn & beans, Sept wheat managed an 18 cent up week!! In other news, Egypt is tendering for August wheat and crop conditions remained basically unchanged – gd/ex for Spring Wheat – 70% (69) & for Winter Wheat – 51% (52).
After a very promising $20 rally this Spring (81-101), Aug Cat has morphed into a sideways pattern (95-102). The rally has stalled out due to the resurgence of Covid-19, choppy beef & cash mkts & a solid premium to cash! While the DJI has provided solid support to the beef complex – rallying 8000 points from its March lows & holding that rally – the cattle Mkt needs further evidence of the economy re-opening to advance upward out its current range!
The Aug Hog contract has had trouble even lifting its head since May 1 despite some really positive export news – in May, the percentage of exports to production rose to 32% – a new record for the month! In addition, the DJI advances most every day & the cattle Mkt has been firm! But the recent Quarterly Pig Crop Report reminded traders of the excess production that the mkt has been unable to absorb! What is needed is the additional demand that the gradual re-opening of the economy will provide!
Bill MooreQuestions? Ask Bill Moore today at 312-264-4337