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
Wht is simply too cheap and as such, has become competitive on the World Mkt! Since mid-May, the Dec Wht contract has plummeted $5.00 (12.80 – 7.80)! Last Friday, the mkt action thru us all a “curve ball” when export sales on Thur were over 1.0 MMT – the highest in a decade but the futures chose to ignore them closing solidly lower! But today, we’re up over 40 cents as Egypt is tendering for a large order -not from the Black Sea & possibly including the US – a real rarity! Their interest signals US wht is a real bargain on the global mkt & the mkt is responding! Also Midwest dryness & supportive Macros are helping!
After a precipitous 3 week break of $1.80 mostly on the back of recession fears, the mkt has rebounded sharply due to a plethora of factors! #1 – hot weather coming with pollination dead ahead, #2 – all the macros supporting – higher DJI, sharply lower US # & crude up $4-5 & #3- Wht finally bottoming with the US an attractive price globally! Corns actual fundamentals are attractive in their own right – low stocks, 3.5 million less acres & total production of 14.5 coming in under 2021’s 15.1!
Lately, it’s been a war between the MACROS (40 year high inflation, record high gas, raising interest rate & recession fears) & Corn’s intrinsic fundamentals (low stocks & hot W)! We feel the latter will ultimately prevail!
Volatility is the watchword for the bean mkt these days as prices just this month so far have been buffeted about for 3 major price swings – 13.00 to 1440, 1440 to 1320 & 1320 to 1390! Recession fears & hot weather are the main protagonists for the extreme price swings! Beans have been coat-tailing corn & wht – as they don’t set pods until mid-Aug!
The USDA in their July WASDE pegged production at 4.505 BB (ly-4.44) & yield at 51.5. 22-23 US Stocks were 230 MB (214) & 22-23 Global Stocks were 312 MMT (310).
Clearly, the Cat Mkt for several months now has been caught in a sideways mkt where conflicting fundamentals have perfectly offset one another – those being the overall recession fears & a very robust grilling-season demand! This Friday, there is a plethora of reports to sift thru – the July COF, the Semi-Annual Cattle Inventory & the monthly cold Storage – albeit all of them occurring after the close at 2pm!!
An impressive upside technical breakout today saw Aug Hogs “gap & go” – reaching their highest levels since early May! The very recession fears that have kept cattle in a tight congestive pattern may have contributed to the hog upside move – as consumers – in search of cheaper cuts of meat to offset the high inflation & gas have opted for pork over beef – eg: a pork chop over a steak! Also, the hot weather has contributed to mounting death losses in the US hog herds – helping to firm the cash mkt! People have to eat – but they can still cut back!! The hog complex will also soon begin the to consolidate in front of the triple-report-day on Friday!!Questions? Ask Bill Moore today at 312-264-4337