About The Author

Bill Moore

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

MAY WHEAT

Clearly, volatility is king in the wheat mkt – ever since the Russian/Ukraine war broke out 3 weeks ago! In the last 7 days, the mkt scored 5 straight limit-ups & then 2 limit downs! With Russia & Ukraine representing 30% of the world wht exports, the mkt justifiably reacted violently to the war – but overdid the upside – to the point, it priced itself out of the export mkt causing the sharp back-off!  When all the smoke clears, the damage done to the Ukraine infrastructure is severe & planting maybe delayed! Eventually, attention will shift back to traditional supply/demand fundamentals – one of which is extreme dryness in parts of the Central plains! Has El Nina moved north??

 

MAY CORN 

Corn is caught “between a rock and a hard place” being part of the export scenario with Russia/Ukraine but also influenced by the soybeans – which were the least impacted by the war – mostly still being driven by the South American drought!  But before the skirmish in Europe even started, Corn had superior supply/demand fundamentals – so export stoppage from Russ/Ukr was simply frosting on the cake! Despite recent price increases, US Corn remains the cheapest on the world mkt – which should enhance exports! And US acres will be lower due to sky-high fertilizer – plus South/American production is being ratcheted down due to their hot & dry! So when the smoke clears from the Russ/Ukr war, corn will still be in a sideways-to-higher mode! And if La Nina moves north for our planting/growing season, prices will accelerate – even from current elevated levels!

 

MAY BEANS

May Beans have been the accidental beneficiary of the Russian/Ukraine War as export stoppages dealt with wht/corn but not beans! But of course, corn & wht are not going vertical while leaving beans unchanged -so spillover support has rallied beans $1.00-1.50! The main bullish impetus for soys continues to be the S/A drought! Just today, Conab lowered their Brazil bean estimate to 122.8 MMT (USDA – 134) – and 7:30am export sales boasted a whopping 3.09MMT!  Going forward, the hot-and-dry weather pattern beginning to emerge in the Central US could be very problematical for the bean mkt! 5-6 year low stocks cannot handle crop production shortages in BOTH HEMISPHERES!

 

APRIL CATTLE

April Cattle has been victimized by two factors – leading to $13 drop since Mid-Feb! First is the cost of feed grain – which has skyrocketed in the past 2 wks – forcing feeders into a free fall – pulling fats with them! Second is concerns about disposable consumer income as the price of gasoline has soared to record levels! How much will be left for meat-buying – with many cuts already high due to the highest inflation in 40 years! And  the Russ/Ukr war has increased concerns about slowing US economic growth – already suspect in the face of rising interest rates in 2022!

 

APRIL HOGS

April Hogs are being pressured by the same forces as April Hogs! Plus, they’re dealing with waning exports! In Jan, exports were down 15.8% while 3rd Qtr production was up 2.4%! Rampant inflation & questionable economic growth in 2022 against the backdrop of the Russian/Ukraine war & rising interest rates – have the Apl Hog contract on its heels!

Questions? Ask Bill Moore today at 312-264-4337