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 01/09/2023
Mar Corn is off to a rough-and-tumble start to 2023 – succumbing to a rainy Argentine forecast, a soaring US Dollar & a plummeting energy mkt! It all adds up to 25 lower on the week – only 2 days into the new year! Its sister mkt Mar Wht is adding to the pressure – currently down over 40 cents for the week due to a plethora of cheap Russian exports & a record crop! But the mkt should stabilize into this week as the all-important Jan WASDE comes out on Thur 1-12-23 at 11am followed by the critical weather forecast for Argentina going into month-end! The jury is not out for Argentina as their dry pattern is set to resume next week! Meanwhile US Gulf Corn is at parity with S/A prices with China slowly reopening!
Mar Bean has not been immune the CBOT drubbing the first 2 days of 2023 – already down 40 cents for the week! The same culprits forcing the sharp price decline in Corn & wheat are at play as well for the Bean Complex – more than expected rain in Argentina, a resurgent US Dollar & a sharply lower crude! As well, farmer selling has picked up after the first – when many producers are unloading after waiting for the calendar to turn – for tax reasons! Even though China is slowly re-opening, it’s a slow process & so far hasn’t translated into a sizeable up tic in exports! The mkt eagerly awaits the USDA Supply & demand this Thur & further weather updates on Argentina! Whereas recent rains have helped, the crop is by no means out of the woods – drought-wise!
Mar Wht has negative fundamentals – keeping it under wraps! Both Russia & Australia are touting record crops & Russia has been inundating the export mkt with its low-priced wheat – keeping it adequately supplied! Much of its “rally hope” rests with the drought in Argentina – which so far has put a significant dent in their corn/bean crops! Should the “hot & dry” continue, the Mar Wht contract could easily coat-tail Corn & Beans higher into the end of January!
Feb Cat has clearly been the upside leader in the meats all year – with 4th Quarter production due to decline precipitously into the 1st Quarter of 2023 – with demand hanging tough without too much of a drop-off from the elevated holiday level thru December! The Wildcard, of course, is the economy! Should we achieve a “soft landing” with inflation being tamed without the economy slipping into a recession, demand will continue to be robust and more contracts highs are very likely!
Amazingly, the Feb Hog chart is a stark contrast to Feb Cat – as the hog contract has plummeted $12.00 (91.50 – 79.50) in just 2 weeks time! After peaking following the Arctic December Blast & a bullish Pig Crop Report, the mkt has had no friends as increased production & slack China imports have rendered the mkt top-heavy – even in the face of a very stout cattle mkt! So just as slowing production has rallied the cattle, bloated pork production has weighed heavily on the pork complex! Today, a “mercy rally” is underway after 7 consecutive down days! Eventually, the dichotomy between beef & pork will favor a pork rally as bargain=hunters will pounce!Questions? Ask Bill Moore today at 312-264-4337