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
Russian President Putin is calling for a review of the Ukraine/Russian grain deal as he is concerned that grain is being exported to the EU & the West – and not the impoverished nations of Africa & SE Asia – as the UN had promised! This announcement led to a vertical bolt in prices of over 50 cents – which has since been trimmed in half! Still, it appears some adjustment of the deal is in order – which would inevitably trim exports out of Ukraine giving the CBOT plenty of bullish fodder! The mkt needed a bullish catalyst to break it out of its 2 month congestion – and this appears to be it! After a $5.00 decline from late May, the mkt has been probing for a harvest low & it now appears to be in!!
Indeed, Dec Corn has been on a roller-coaster ride today – being buffeted to & fro by a plethora of fundamentals/events! First, last nights gd/ex crop ratings came out unchanged at 54% – higher than expected – causing a 5-6 cents sell-off at 7pm Tues – but then President Putin issued his request to redo the Ukraine Corridor Deal which rallied the mkt sharply – & finally news out of China that bean exports in August were the lowest since 2015 – due to the China economic slowdown from their zero Covid policy!
Longer term, the Pro Farmer shocker of a 168 BPA has gotten everyone’s attention and if its even close, the stocks will tighten further this Fall after harvest – from an already snug 6-7 year lows! The upshot would be a strong rally – barring any economic collapse both in the US & globally!
The USDA will issue their Sept WASDE next Mon 9-12-22 – derived from the 1st field survey! Interest will be very high for this report to see how close the USDA comes to the Pro Farmer yield estimate!
The Beans are clearly the “weak link” at the CBOT – starting with the relatively high yield # of 51.7 – issued by the Pro Farmer Tour & compounded by demand issues out of China! Today, their August bean export #’s were reported to be the lowest since 2015 as China continues to struggle with their zero Covid policy! The mkt action today definitely validated the bearish undertones of the beans – as the mkt rode the wht rally to a 32 cent high apex – but couldn’t hold the gains – ultimately closing down 15 cents! Some pundits are predicting a record bean crop! Next Monday at 11am, the USDA will provide more clarity with their issuance of the Sept Supply & Demand Report!
The new upside leader in the meats – cattle – turned in a very shaky performance today – possibly indicating demand might be running a little thin – post Labor Day! The global Macro economic issues could weigh heavy on the meat complex – especially in the wake of Chairman Powell very hawkish remarks in Jackson Hole – 10 days ago! He insists on fighting inflation by ratcheting up interest rates – whatever the costs! This could very well mute meat demand in the next month or so!
The chart clearly indicates a top – which coincides with the end of the grilling season as well as waning Chinese pork demand as China deals with its zero Covid policy! However with the big discount to cash, Oct Hogs may have already dialed in a lot of the bearish news!Questions? Ask Bill Moore today at 312-264-4337