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
Surprise! Surprise! Not so fast you bears! A November WASDE widely considered to be quite bearish – jacking up yield, production & carry-over -turned out ANYTHING BUT! Most notably, bean yield came in at 51.2 ( avg-51.9, Oct – 51.5)! It wasn’t a widely bullish # by any means – but the sheer fact it came in lower when everyone was leaning decidedly higher – is significant & has, in our humble opinion, established a harvest low Tues at 1081! coupled with an expected bearish USDA Report were slack exports & anticipated higher acreage in 2022! But the mkt action indicates that these bearish fundamentals are dialed in!
Unlike bean #’s, the corn #’s off the 11/9/21 WASDE REPORT were a touch unfriendly – Production 15,062 (15,040), Yield 177.0 (176.8), US Stocks – 1,493 (1,482) & Global Stocks – 304.4 (301.4)! The mkt stalled out for a day – but rallied hard the second day after the report! The mkt reasoned that while all the numbers were slightly higher than expected, it wasn’t enough to hurt the mkt! Plus, harvest pressure is almost off the mkt & the charts have been trending up sent Harvest lows were set after the Sept USDA Report! As well, the supply/demand fundamentals for corn going into 2022 are reasonably solid! Demand is well supported by the rising ethanol mkt & US corns position on the world mkt as the cheapest feed grain! And supply could be in jeopardy as corn acres move to bean acres due to high cost & relative unavailability of fertilizer! Carry-over stocks are still relatively tight – that’s why prices are hovering just under the $6.00 mark!
The Wht Complex has been the upside leader at the CBT since Labor Day – with all 3 contracts scoring contract highs – Chicago Dec Wht 830, Kansas City Dec Wht 840 & Minneapolis Spring Wht 1080! Dry areas in the plains & Canada have reduced production & Russia’s escalating export tax has shifted US export business to the US! But the mkt has recently become overbought & has corrected hard! Production issues in Europe & Australia still persist & could lower global production in 2022!
Dec Cat has been confined to an extremely tight range for over two weeks – meaning Bullish & bearish fundamentals are in perfect equilibrium! However, going forward, cattle has a strong seasonal-up with solid holiday demand ahead – including Thanksgiving, Christmas and the resumption of many corporate & family get-togethers! We see this trend along with a dose of inflation – sending cattle prices back to their August highs by year-end!
During the month of October, Dec Hogs broke $13 (85-72) – reacting to a severe drop-off in Chinese pork imports – as they finished rebuilding their hog herd – previously decimated by ASF! But that bearish news seems to be dialed in – as the Dec Hog contract adjusts to the “new reality” of less-China! But the ace-in-the-hole is resurgent US pork demand – bolstered by vaccine mandates & booster shots – which could rally Dec Hogs to their June Highs by 12/31!Questions? Ask Bill Moore today at 312-264-4337