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 are taking a breather – and deservedly so after a stunning $2.20 rally (870-1090) since the August WASDE Report! With the month-end Friday, the election next Tuesday & the Covid resurgence, the mkt has good reason to pause – as it tries to sort out the impact of these mkt events! Meanwhile Exports have remained stellar – Mon Inspections were 2.6 MMT – harvest is all but wrapped up with beans 83% in (avg-73) & traders wonder if the Nov WASDE will reflect lower yields! Brazil has received some rain allowing producers there to plant 23% (lw-8) of their bean crop! All eyes will continue to be on their crop as they’re the world’s biggest producer! So ahead, exports vs weather in S/A, Russia & US Plains!
After a $1.00 rally (320-420), Dec Corn is also “going to the sidelines” anticipating the November WASDE Report & any dramatic yield changes – as well as the very momentous election next Tues! Should Biden get in, will he be as AG-FRIENDLY as Trump has been? China continues its relentless buying pace – as flooding & a rapid hog rebuild has necessitated massive imports! Corn harvest is 72% in (avg – 56) & producer selling has been minimal! The Covid Resurgence has been hard on ethanol demand with less driving now! However the mkt’s ability to rally during the US harvest & during the planting of record crops in S/A – speaks to its impressive underlying strength!
Dec Wht has followed suit along with its “sister mkts” Dec Corn & Nov Beans assuming a corrective posture in front of several mkt-moving events – potential rains in Russia, Ukraine & the US Plains and the Presidential election next Tues! Yesterday’s harvest progress report showed Winter Wheat 85% in (80-avg) and surprisingly only 41% of the crop rated good-to-excellent! However, so far, the correction has been relatively tame (635-615) given the markets steep uptrend (500-635) since the August WADSE!
Dec Cat has felt the resumption of Covid as it promises to encroach on 4th Quarter demand – resulting in a $10 correction (113-103)! But the downdraft seems to have run its course – as the recent Cattle-on-Feed – featuring the highest total cattle-on-feed for the month of October & placements of 6% over last year – appear to be dialed in! So the mkt seems to be short-term oversold – but tough sledding is ahead as average weights are on 5 year highs & demand is on the wane due to the pandemic!
Dec Hogs, after a stunning $23 rally (50-73), has since retreated $8 (73-65) both moves due to the vagaries of China’s insatiable demand for US Pork! At first, China while attempting to rebuild a hog herd decimated by ASF – couldn’t get enough of our pork! Now the perception is that their hog herds are sufficiently rebuilt to the extent that they won’t need as much in 2021! Thus the correction! But still demand will just gradually slow & the contract is still at a sizeable discount to cash – and both these factors will support the price action short-term!
Questions? Ask Bill Moore today at 312-264-4337