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 mkts scored a KEY UPSIDE REVERSAL following last Friday’s WASDE Report which was bearish – as advertised – with yield 176.3 (174.6), production 14,996 (14,750) & US stocks 1408 (1242)! And the mkt validated the key reversal this week by breaching the report-day Friday highs! In addition, supply/demand fundamentals are very supportive – early yield reports are disappointing & with US Corn the cheapest feed-grain in the world, the US will be a prime export source – going forward! As well, the global stocks/use ratios are at record lows! The Sept USDA appears to have established an early harvest low for corn!!
Beans clearly haven’t followed corn’s lead – as they remain stubbornly entrenched in a tight trading range – seemingly more restricted by the bearish USDA report on Friday 9/10 than corn – yield 50.6 (50.0), production 4,374 (4,363) & US Stocks 185 (160)! The fact that bean harvest hasn’t started yet may be a factor – as corn is deriving strength from early sub-standard yields – plus corn maybe a better deal on the world mkt! Nonetheless, we feel the Sept Report will be a high-water mark for all the grains! And export interest in beans is quite robust – with flash sales to China being announced most every day & in fact todays export sales came in at 1.6 MMT – at the high end of the range! The carry-out stocks came in the year at 6-7 year lows and the total bean crop just a skosh higher than last year will not refill it! That’s why the mkt is hovering around the $13.00 mark – much higher than recent years – just in front of harvest!
Dec Wht has rallied nicely with Dec Corn since the USDA Report for two reasons one, the report was actually friendly to wht – unlike its sister mkts – corn & beans – as US stocks came in lower – 615 (627). Second, global production is down with smaller crops being reported from Canada, Europe & Russia!
The Oct Cat said “enough is enough” after breaking $12 (133-121) since late August off “demand jitters” – so when the fire at the Grand Island packing plant forced a knee-jerk down this week, that was basically “exhaustion selling”, which established a spike low on the charts! The bearish impetus was “demand jitters’ caused by the re-emergence of the Covid Virus! We see solid domestic demand returning to the mkt later this Fall off the fertile Thanksgiving & Christmas holiday seasons!
Oct Hogs have witnessed a huge upside resurgence today – off ideas the downside was way overdone! The mkt normally trades at a $4.00 premium to cash but today it started at a $20 discount – and it quickly rectified that imbalance! The mkt has been bludgeoned by “demand woes” including a domestic fall-off due to Covid & an export decline due to China’s import reduction! We still feel the holiday demand at year-end will rally this mkt back to its highs!
Questions? Ask Bill Moore today at 312-264-4337