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
A weather-induced $2.00 break (1780-1580) starting in early June induced by moderating weather has corrected some 70 cents due to a plethora of factors : A 3% drop in the crop ratings, China loosening of quarantine restrictions & general short-covering in front of the June 30 Acreage & Stocks Report! Week-end rains prompted a solid down yesterday but the jury is still out as beans don’t mature until August & with 6-yr low stocks, we can afford a substandard crop such as South America experienced!!
After a 70 cent plummet (8.00-7.30) since mid-June, July Corn has also corrected – responding to a 3% drop in the good/excellent crop ratings Monday (70-67) & also the welcome news that China is easing their covid quarantines – which should lead to increased exports! All eyes will focus on the USDA Acreage report on Thursday – which should show corn acres at 89.6 MA- up 200,000 acres from Mar 31 but down almost 4 MA from 2021! Rain & cooler temps have induced a correction from the near-record $8.00 mark but with pollination just a few weeks away, the yields are a big question mark! One thing that is for certain is that there is NO MARGIN FOR ERROR this year – especially after such a poor crop in South America with carry-out on 6-7 year lows! Anything below trend-line will not be enough to prevent sharp rallies!
After $3.50 break off its mid-May highs, July Wht seems to be approaching harvest lows with Monday’s crop report showing 41% of the Winter Wheat in! Spring Wht showed a good/excellent rating of 59%! Egypt is also in the mkt for more wht! Much like its siste mkts corn & beans, Wht will take a breather this week – awaiting the results of the Thursday USDA Acreage & Qtly Stocks Report at 11am – which is also the last day of the month & quarter!
A picture is worth a 1000 words & the above chart speaks volumes about the current stalemate that the cattle mkt finds itself in! A sideways, congesting mkt implies we have conflicting fundamentals keeping the mkt “at bay”! And indeed that’s the case! On the up side we are amidst the best “demand period of the year” – the barbeque season! But on the down side, inflation is at 40 year highs with gas at all-time highs – forcing the Fed to substantially raise interest rates to try to control it! The result is a slowing, sluggish economy which acts as a drag on the positive seasonal demand – resulting in a sideways trading affair!
Ditto for July Hogs! But with an additional caveat – in the form of a major USDA report issued Wed 6-29-22 – The Qtly Pig Crop Report! So, the hog #’s may be adjusted tomorrow but the “jury is still out” on the all-important DEMAND – dependent on how the economy fares thru Summer’s end!!
Questions? Ask Bill Moore today at 312-264-4337