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
Dec Wht has been confronted with a plethora of conflicting fundamentals that have kept it range-bound – especially in light of the customary evening up by the funds in front of this Friday’s WASDE REPORT AT 11AM! On the bull side, the crop rating on Spg Wht dropped 6% to 64 on Mon – also India plans to scrap their 40% import duty tax– which opens things up for the US! On the bear side, at least 10 ships have sailed from Ukraine laden with grain & with 2 more being loaded – and a private Russian firm has jacked up their wht estimate to 95MMT (USDA – 81.5). So, the good is offsetting the bad – keeping the contract in a tight range!
Dec Corn has exhibited some very impressive technical action in the past 3 weeks – twice leaving upside gaps – today & on 7/26 – despite some bearish events – the resumption of corn shipments out of Ukraine & the Nancy Pelosi Taiwan Visit! Yesterday’s crop ratings were very disappointing with gd/ex at 58% – a 3% decline from last week – & they prompted a “gap & go higher” last nite at the 7pm opening! It seems the “dry & hot” conditions are slowly taking their toll on the nascent crop! It doesn’t take much below trendline to get the market’s attention when stocks are on 6-7 year lows!
On Friday, the USDA issues their August WASDE REPORT – & it’s widely expected to report yields a little lower than last month! The European Union is reeling from their drought & has been forced to import from Brazil & the US! Because we came into 2022 with a tight balance sheet – especially after South America’s issues, there is no margin for error!!
It’s interesting that Nov Beans are the upside leader today – advancing 34 cents even though they had the mildest drop in crop ratings on Mon – of only 1%! But they are at 59% and August is the beans critical maturation month! And exports of late have been positive – with 867,501MT on Monday’s inspections & a flash sale of 132,000MT to China! Plus, the tecently passed congressional bill is friendly to biofuels. Much like all the CBT commodities, beans will most probably morph into sideways pattern – as funds pare their risk going into Fridays USDA Report!
After lagging the Oct Hog rally for the longest time, Oct Cat has finally kicked into gear – rallying within $2.50 of its April highs before correcting its overbought condition today! Supply has been reduced due to death loss from the heat & general liquidation from dry pastures & high feed costs! Demand has been augmented due to solid grilling season, the drop in gas prices & the narrowing gap between pork & beef! If inflation #’s are down this month, the Central Bank may become less hawkish about raising rates – which would help stimulate demand!!
Oct Hogs managed to challenge the 3/31/22 contract highs of 110.82 yesterday before succumbing to an overbought condition & correcting $2.00 off its highs! With the export sales due out Thur & the USDA Supply & Demand on Friday, the mkt might well take a breather after its season high test – and take time to digest the #’s from the end of this week! But many feel the mkt has the supply/demand fundamentals to go another leg higher!Questions? Ask Bill Moore today at 312-264-4337