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
Nov Beans had a stellar August rallying a full dollar (865-965) since Aug 10 due to a myriad of factors – dialed in bad news – a “flash drought” – robust exports – wind damage & an eroding US Dollar! Even today as they attempt to correct after as-expected crop ratings showed a 3% decline, the set-back is mild -only about 10%! The BEARS say the rally has just about run its course -with stocks still formidable & harvest right around the corner – but the mkt doesn’t act that way! China should continue to buy with still historically cheap prices & a declining $$ – and indeed the crop isn’t in the bin yet!
Whereas the “flash drought” that has descended upon the Central Midwest in the past 3 weeks has mostly impacted the bean mkt – still in its pod-setting phase – Dec Corn has experienced “spill-over support” as well – tagging along with Nov Beans! But prodigious identical 8am export sales of 596,000 MT each on Mon & Tues has certainly under-pinned the corn mkt! And following Pro Farmers 177.5 (USDA-181.5) yield estimate, FC Stone came out with 179.6 on Mon! A continued slide in this yield into harvest could tighten up carry-out stocks – once thought to be massive! Finally, after a 44 cent (320-364) run-up since Aug 10, today’s correction off in-line crop ratings is rather shallow – another indication of the mkt’s underlying strength! Also, China’s ability to control its Swine Flu epidemic – has dramatically increased its hog herd – and with it, its feed demand (corn imports)! Dec Corn – despite its recent surge – is still very cheap historically at $3.50.
Dec Wht had a banner day – closing up 12 cents – reaching 4 month highs! There was no one fundamental that can be attributed to the rally – so we can “round up the usual suspects” – Chinese Wht buying in the offing – Egypt tendering for Russian Wht – issue with foreign production in the Black Sea region & Australia – and finally spill-over support from corn & beans! Whatever the specific reason, with corn, beans & wht hovering just over 10 year lows & the US Dollar going down almost every day, the “path of least resistance”
Seems to be up!
After a 5-month, $25 Bull Run, Oct Cat has corrected $5 – for a number of – reasons – feeders being forced off of pasture into feedlots due to the “flash drought” – heavier weight cattle & more of them as forecast by the last COF Report – the end of Labor Day buying by retailers! However, the correction may have run its course – should the economy continue to open up with increasing restaurant demand.
Oct Hogs are caught in tight trading range between $53 & $57 – one day down $2.00 – the next day up $1.50 – as very stout China Demand for our pork offsets big slaughters & anticipated big September production!
Questions? Ask Bill Moore today at 312-264-4337