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
Surprise! Surprise! Out of all the crazy, tumultuous news this week, Jan Beans have emerged as the improbable upside leader! A mkt previously “under wraps” due to a record forecast out of South America has benefitted indirectly from the “last Saturday” news that Russia had pulled out of the Corridor Pact! The implication was less palm oil – helping boost bean oil – which in turn rallied beans! Also, a very dry Argentina & somewhat dry Brazil contributed to the up! Conventional wisdom had the on-again, off-again pact mostly impacting corn & wheat! The mkt’s extreme sensitivity to “headline news” was once again validated at 5am today with Russia back in the pact! Bottom line – new 5-wk highs!!
Dec Corn gladly jumped on the “Corridor Roller Coaster” reaching $7.00 on Monday after the week-end news that Russia nixed the Pact – then breaking to $6.80 early this morning when Russia announced they were back in! Macro news once again looms large today as Fed Chief Jerome Powell is set to announce a 3/4 % rate hike at 1pm. More importantly will be his remark afterward – when traders try to get a read on his future policy ideas! The DJI has rallied 4000 points in October on the sense that he will “take his foot off the pedal” but recent economic #’s are still pretty inflationary – which would support his continued hawkish stance! Friday at 7:30am, unemployment #’s come out for non-farm payroll & total unemployment! These #’s could provide a “scorecard” on how the Fed is doing in its battle to control inflation by ratcheting up interest rates! Corn harvest is 76% done (64) and focus will now shift to South America’s planting & crop development Exports are the biggest negative – hamstrung by non-competitive US prices, China’s slow growth, a 20 year high dollar & Mississippi River shipping woes! But stocks & the crop are short! A STAND-OFF!!
Dec Wht was easily the most impacted commodity at the CBOT off the flip-flopping Ukraine Pact Deal – initially rallying 70 cents thru Tuesday’s close – then subtracting all that premium today off the news that Russia was back in! As well, the 3pm crop condition issued Monday at 3pm reported a paltry 28% good-to-excellent rating for Winter Wheat (ly – 45)! Argentina is also very dry – as well as Australia! Much like her sister mkts, Dec Wht could stand a big increase in exports! The geo-political & Ukranian issues will hold the mkt hostage near-term & should the US $ extend, its recent 400 point break, much needed exports will begin to flow back into the wht complex!
An over-bought Dec Cat mkt has corrected $3.00 off its recent highs despite a strong cash mkt! The supply/demand fundamentals have been quite strong with the high cost of feed discouraging feeders from increasing placement & consumer demand has been stalwart as he cuts back on everything but food!
The current volatility due to the back-and-forth Ukraine Corridor Pact & the upcoming fed Meeting today at 1pm is encouraging profit-taking & evening up as traders adopt a wait-and-see attitude!
Dec Hogs have already corrected $6.00 off its recent highs on the idea production increases are coming in the next 3-4 weeks! The cash as well has slumped of late & the mkt is rightfully concerned about the Fed policy going forward after another 3/4 % increase in rates today and the volatile Corridor Pact in Ukraine! Traders & funds are evening up waiting on the current developments!Questions? Ask Bill Moore today at 312-264-4337