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
The above chart speaks volumes about the very daunting task of carving out “harvest lows”! For two months, Dec Corn has been consolidating between 475 & 500 – with headwinds being provided by harvest pressure & tailwinds by recent Mexico imports & strong domestic ethanol demand! Even the newly erupted Israel-Hamas war– which triggered a $4.00 rally in crude wasn’t enough to sustain a rally in Dec Corn! But now with harvest approaching the half-way point (now 34% in), we feel the mkt is very close to emerging from the sideways pattern to the upside in a post-harvest rally! The ongoing bearish news – slack exports & a record Brazil bean crop – are in the mkt & it’s low price competes with Brazil!
Despite 2 flash sales of beans to China – 121,000mt & to unknown 213,000mt & the harvest progress – 43% in ( 50% normally means harvest lows), the Nov Bean contract continues to make new lows – now on a 60% correction from its 1130-1430 rally from June-July! Perhaps, the mkt is concerned about tomorrows 11am WADSE REPORT – which is estimating a 4.132 production & a 49.9 yield – both slightly under the Sept Report! Or maybe recent yields are coming in better-than-expected! Whatever the case, harvest lows have to be “close at hand” – particularly when the acreage is 4 million acres under a year ago! And finally, the $1.50 break in Nov Beans since late August has to be very friendly to exports going forward! We’ll see how the USDA #’s Thur impact the mkt!
As has been well-advertised, Dec Wht has been victimized by Russia’s record crop which translated into an inundation of cheap wheat exports on the world mkt – resulting in the bargain-basement prices we now have! But the recent world mkt has been quite active with Egypt, Bangladesh, Thailand & Egypt recently in the mkt for wht! A negative would be the partial resumption of wht transports thru Ukraine! The lows will be established – coinciding with harvest lows in corn & beans as their support “spills over”! In the end, LOW PRICES CURE LOW PRICES and this will crater out Dec Wht!
The 2023 Cattle Mkt has been an absolute BULL MKT EXTRAORDINAIRE – relentlessly forging new record contract highs – week after week – with demand supporting this mkt at these lofty levels – even though the top demand “grilling season” is long past & much cheaper pork alternatives are available in the local supermarkets! The bullish fundamental catalyzing this amazing BULL is “tight supply” – even continuing into 2024! The 4th Qtr production is 257 million pounds under a year ago! Pick a top at your own peril! You just can’t pay enough for a high-quality steak!!
Logic would dictate that with cattle prices continually hovering at record levels that the much cheaper pork alternatives would be getting a lot of play in your local grocery store – but that has NOT been the case as Oct Hogs have languished in a tight range some $10-12 off their season highs! The disparity lies in supplies & exports! 4th Qtr Production is predicted to be 665 MP over last year & China’s buying of our pork has dropped off significantly due to their economic slowdown! The bearish Pig Crop last month was a harbinger of things to come! Finally, consumer preference cannot be ignored – many just prefer a good ole steak over a pork chop – regardless of the cost!
Questions? Ask Bill Moore today at 312-264-4337