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
In the past month, Sept Beans have exhibited some extreme volatility due to the time of the year & the massive fund participation! Very simply put, the mkts went down almost $2.00 on mostly macro factors – namely recession fears – but back up $1.30 off incoming “hot & dry”! Bean carry-over is still at 6-7 yr lows & still ahead is pod-setting, heat & harvest! So the jury is still definitely out on crop size although the July WASDE report tomorrow should shed some light on crop #’s! Early calls for the beans is 4.515 BB – only slightly higher than 2021 – & certainly not enough to replenish the depleted stocks!!
Likewise, Sept Corn has been buffeted by “Macros fighting positive Fundamentals” in the last 6 weeks plummeting $2.00 (7.80-580) & then rebounding $.90 (5.80-6.90) last week the added advantage for corn is the 3.5 million less acres than 2021 & the generally better export potential! For instance, todays export inspections in corn were 937,725 vs 356,716 in beans! It’s way too premature to write an obit on corn in early July – before pollination upcoming hot & dry & harvest – regardless of record-high gas & inflation! Other negatives include a soaring US dollar & more China covid lockdowns! The July WASDE Tues at 11am is estimating 2022 production 14.520 BB (2021-15.115) & yield at 177.0 (2021 – 177.0)! But paramount for corn ahead is the weather during the upcoming pollination!!
Sept Wht falls into a different category as it has had a 40% correction off its Mid-May highs (1280 – 780) since 5/17/22 – the most of any BOT commodities! The last leg down was exacerbated by the recession fears gripping all mkts! So, bargain hunters were running rampant the last few days forcing a $1.60 rally! (780-940)! With July pollination & August bean-setting ahead, Wht will coattail corn & beans! But one stubborn negative impacting all grains is the meteoric rise of the US Dollar since 6/1/22 – which has soared $7.00 – making our feed grains that much more expensive for our trading partners!!
The Aug Cat mkt – as you can see – has had trouble “ getting out of its own way” all Spring & Summer – while its languished in a $7-8 dollar range! Conflicting fundamentals have kept it range bound with the best demand period of the year – the current “barbeque season” being offset by economic weakness due to recession fears! But current breeding herd liquidation looks to be jump-starting a rally out of the congestion! Today’s $3.00 range upside break-out seems to offer technical validation of this upswing!!
Aug Hogs have had a nice $12 rally in the past week – supported by a strong cash mkt & expectations of a 2nd to 3rd Qtr drop in production! But the nice up has stalled out – even today with a soaring cattle mkt – as the mkt became overbought & needed to correct! Chances are possibly “recession fears” have been overdone & the seasonal grilling demand is kicking in – and that both meats are turning higher!!
Questions? Ask Bill Moore today at 312-264-4337