AgMaster Report 07/06/2023

SEPT CORN

Wow! A perfect storm descended upon corn mkt in the past 10 days & forced a $1.50 freefall in the mkt – totally eliminating the weather premium the mkt had established due to early-season dryness! First were abundant rains hitting the Farm Belt & then the USDA shocker last Friday – raising the Corn acres 2 million over the estimate & 5.5 MA over last years 88.5 planted acreage! Many pundits are questioning the veracity of the #’s but for now, we have to go with it!  However, since the corn hasn’t even pollinated yet, it seems premature to write an “obit” on the mkt! The good-to-excellent rating Monday only went up 1% – 50 to 51! And the extreme 25% drop in price may stir some export interest!

 

SEPT BEANS

Beans & corn exhibited some historic divergence last week – that is rarely seen! While Sept Corn plummeted $1.50, Sept Beans RALLIED the same amount – mostly on the back of a “surprise, surprise” USDA acreage report which lowered bean acreage by a incredible 4 million acres from 87.4 (2022) to 83.5! That coupled with the Argentine Drought has created a potentially very tight carryout situation for the bean complex! Add to that some recovering export demand, and the mkt could see some very serious “price rationing” this Fall! The dichotomy between the extreme drop in corn & near-vertical rally in Beans has created a very interesting scenario going into Corn’s pollination & Beans pod-setting!

 

SEPT WHT

Sept Wheat coat-tailed Corn & Beans down last week $1.20 (760-640) off the massive rains & surprise corn acreage – even though Friday’s USDA Report for wheat was neutral for acreage & friendly for Qtrly Stocks! But this week, the mkt is stabilizing off better global demand & too much rain for the Winter Wheat now in harvest!

 

AUG CAT

Aug Cat for the longest time – was the upside leader in the meat complex but in the past month – has surrendered that role to Aug Hogs! However, with the sharp break in corn, Feeders have gone vertical – carrying cattle with it! Aiding that rally was also the $10-12 discount Aug Cat was to cash! But that disappeared as the contract approached record highs – where demand became uncertain – especially in the face of much cheaper pork products! And so the current correction ensued!

 

AUG HOGS

It took a while but Aug Hog finally turned the corner – in a dramatic way – soaring over $25 (75-100) in a little over a month! Even though overbought, the mkt continues to be fed by the highest cut-out in 10 months, a tight supply of mkt-ready hogs & the lowest July weights in 5 years! Plus, supermarkets continue to feature pork as the “grilling season” rambles on toward Labor Day!

Questions? Ask Bill Moore today at 312-264-4337