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
You can see we’ve fallen into a trading range as the mkt awaits further weather developments from now to mid-August as the corn finishes its pollination & the beans their pod-setting! With record exports (28 MMT) & 7-year low carry-over stocks, we desperately need excellent to record yields to refill our pipelines! Anything less will give mkts an upward bias! The conditions are quite variable with some farms in great shape & others not so much! All eyes – going forward will be focused on the Aug 12 Supply & Demand Report!
Sept Beans have stubbornly congested within $1.50 of the $15.00 highs they posted in late June – despite cooler, wetter weather we’ve experienced in the past month! The reason is the supply/demand balance sheet is extremely tight – leaving no “margin for error” for any substandard, below trend-line yields! There is a wide variability of crop conditions from pristine in some areas in Iowa & Illinois to wretched in the Dakotas! And Brazil has been bludgeoned with both drought & frost! This coupled with an impressive economic rebound from Covid in the US & Globally – will give the mkts an upward bias should the pod-filling weather in August be sketchy!
It turns out the brutally low crop ratings for the Spring Wht Crop – currently at an historic low 9% (gd/ex) were unfortunately on-the-money – as confirmed by Day One of the Wheat Quality Crop Tour! An early yield of 29.5 bpa – 32% under the average – was reported – leading to 20-25 cent gains in the Chicago, KC & Minn Wht contracts! And this in turn has pulled up corn & beans into positive territory.
Recent USDA Reports have indicated waning supplies into the Fall – first the cattle inventory report on 6/30/21 down 1-2% & then the July COF showing placements on the low end of expectations & marketings on the high end! Plus cut-out prices have been steadily rising! This points to much stronger demand – mostly derived from a robust economic recovery by the US & Global economies! Whereas there has been recent fears that the new Delta Variant would force a turn-down in stock prices, many pundits now feel it will be just a “bump in the road” as the re-opening of restaurants, sports events & concerts will continue to augment demand for beef – sending Aug futures to their June highs!
Aug Hogs corrected over $20 in June – anticipating a major slow-down in Chinese imports – but they didn’t fully materialize & the mkt has since recovered – being energized by a resurgent economy – feeding pork demand – at every level – restaurants, sports events musical concerts, etc! We feel this demand will offset any reduced China consumption – eventually pushing Aug Hogs back to their June highs!Questions? Ask Bill Moore today at 312-264-4337