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 Sept 30 Quarterly Stock Report was a bearish surprise reflecting stocks at 256MB (est -172, 145-202) & the mkt plunged accordingly – taking out the summer lows by a smidgen! But today is a nice recovery on “Turnaround Tuesday” as the mkt seems to have shaken off the negative data – also very mindful that harvest is 34% complete (avg -26) & that conventional wisdom states harvest lows normally occur at the half way point of harvest! Further pressuring the mkt is saber-rattling on the US/China trade deal! Plus higher than expected yields! The bear report may have been the final spike-down in front of harvest lows!
Contrary to the bean #’s, the USDA issued a bullish Qtly Stocks Report for wht with stocks predicted at 1780 (1857 range 1783-1998) & all wht prod at 1646 (1681 1648-1720)! Coupled with these friendly #’s was the ongoing issues in Russia as they try to protect their dwindling stocks by enacting export taxes! It all contributed to maintaining Dec Wht as the upside leader at the CBT – as the chart clearly indicates! So as nasty as the bean #’s were, they seemed to be offset by the wht. Inflation is another major factor – as indicated by the meteoric rise to multi-year highs in Palm Oil & Oats! Plus, long-in-the tooth traders have forever argued that oats are a leading indicator for corn, beans & wht!
Dec Corn is caught somewhere in the middle – being pressured by a slumping Nov Bean contract but supported by a buoyant Dec Wht contract! The predictable result is a sideways mkt congesting in a tight range (525-550)! Plus conflicting fundamentals have added to the up-and-down trade – continuing harvest pressure, the expectation of a bearish WASDE report next Tues 10-12-21, rain-aided Brazil planting, solid wkly export sales & 8am flash sales & a surging crude oil mkt recently breaching 3 year highs! We feel harvest lows in corn were established right after the September WASDE Report – and the mkt is waiting on additional yield data & the Oct USDA Report – before advancing higher!
After a protracted $13 break from its August highs -mostly caused by Covid demand fears, the mkt established a low with a sharp no-brainer up this week – with no apparent reason – the best kind of up! Vaccine mandates imposed widely across the country at schools & businesses seem to be working – as the Delta Variant is slowly being mitigated! The mkt now anticipates a strong domestic demand pattern going into the Thanksgiving & Christmas holidays!
A Dec Hog contract ravaged by China’s sharp decrease in pork imports was resuscitated by a Bullish Pig Crop Report – a few weeks ago! It contributed to a stunning $13 rally – highlighted by leaving an open $3.00 upside gap! As long as that remains unfilled, it will act as an upside impetus for the mkt – as it feeds off renewed domestic demand going into the Thanksgiving & Christmas holiday period!
Questions? Ask Bill Moore today at 312-264-4337