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
AgMaster Report 12/15/2022
A US artic cold snap & a dry Argentina are the main drivers of a 20 cents-plus up day in Jan Beans – as the mkt challenges 3-month highs in an otherwise thin & listless Holiday trade! Mon inspections came in a respectable 1.62 MMT and the US Dollar continues its relentless downward descent – chalking up 1100 points of losses since late Sept! And this weakness seems to be translating into a more competitive US posture in the South American export mkt! It had to eventually! China’s weak economy due to its Zero Covid Policy – continues to be a drag on US exports! Japan, in a surprise move, raised its interest rates – in keeping with the global trend! But S/A weather is the Big Kahuna- a “record crop” is no lock!
Since early Dec, Mar Corn has been confined to a tight trading range (635-660) – being buffeted to & fro by the ever-volatile Russian-Ukrainian War, South American weather & China’s ongoing economic woes! But one very positive development is the new-found US competitiveness in the South American mkts! Argentine Corn is now over the US for Jan/Feb & Brazilian Corn is on a par with the US Gulf price for Feb-Mar! Apparently, the sharply declining US Dollar has finally kicked in to aid the US Exports! We should see a marked improvement going forward! Better exports & a lesser Argentine crop should extrapolate into a gradual rally in Mar Corn into 2023!
An Artic Cold Blast is sweeping thru the Mid-West – wreaking havoc on people, animals & crops! And wheat is no exception – especially the winter wheat crops that don’t have adequate snow cover! The mkt seems to be numb to further escalation of the Russian-Ukraine War & its bullish impact on wht prices! Plus, Russia’s record wht crop & low priced wht-for-export has been keeping a lid on prices! But the $5.00 drop in Mar Wht since early May seems to be enough! The mkt may need to ride the coat-tails of a strong beans/corn rally off a disappointing Argentine Crop!
Artic cold (more death loss), still robust holiday demand & a lower beef production into the 1st & 2nd Qtrs of 2023 have kept the Feb Cat buoyant & within shouting distance of the contract highs! Barring an economic collapse in the 1st Qtr of 2023 due to IR increases, Feb cat should eclipse its contract highs in January!
Holiday Demand has supported Feb Hogs but hefty production increases loom for for the 1st Qtr – lending a bearish slant to Hog prices in 2023! Normally, first quarter production would decline by 100-400 million pounds but only a 5 MP drop is expected this time! The last time this happened – in 2015, the Feb Hog Contract lost $15.00 by expiration! Only an unexpected economic recovery in early 2023 would seem to be able to reverse this negative trend!Questions? Ask Bill Moore today at 312-264-4337