AgMaster Report 11/07/2023

JAN BEANS

A picture is worth 1000 words! And indeed, the above chart speaks volumes to the fact that “harvest lows are in”! And why not? Bean harvest is 90% in, the US Dollar plummeted last week making US exports much more attractive, the Farmer is storing – not selling, South American planting is behind & the Fed said last week that there won’t be any more IR increases this year – which is very favorable to all commodities! Just this morning, there was a flash sale of beans to China & Monday inspections were over 2 MMT! Furthermore, the USDA Nov WASDE Report due out Thur at 11am is predicting 4.1 BB – UNDER 2022’s 4.28! Looking ahead, the extent of S/A pltg issues & exports will determine the rally’s length!

 

DEC CORN

Corn’s issue the last half of 2023 has been one much more of “demand” than “supply”! Granted the 2023 crop is estimated at a whopping 15.07 BB – well above their 2022’S 13.70BB – a # much higher mostly due to a 3-4 million acre increase in planting! But this increase has been well-advertised for some time & appears to be dialed in! What’s of more import is the fact that US Gulf Corn is now the cheapest anywhere globally – which should lead to a sizeable increase in exports into 2024! Today, already a flash sale of 289,575 MT sale to Mexico was announced – with much more expected! And domestic ethanol demand has been quite strong all year!  This coupled with South American planting issues & the fall-out from geopolitical issues in Europe & the Middle-East – should all energize a strong rally from current levels – with harvest pressure all but over!

          

DEC WHT

Dec Wht – since early Oct – has been stuck in a 60 cent range (540-600) with not enough bullish news lately to rally wht from its extremely depressed price level! Potential rallying points would be Russia’s continued attacks on Ukraine ports, the likelihood the Middle-East conflict would spread, a 6 week-low in the US Dollar & a net short of over 100,000! These, a post-harvest rally in Corn & Beans & Chinese demand for US Wht should finally move wht out of its historically low trading range!

 

DEC CAT

 

Not so fast you “Cattle Bears”! After the very negative 10-20-23 Cattle-On-Feed Report which reflected 6% more placements (1% exp), futures responded with a very decisive, very rare limit-down! But that was “all she wrote” on the downside – as the mkt stabilized & subsequently recouped all the report losses & then some – but currently struggled to extend those gains as creeping worry about sustaining demand at these record levels & the 6% increase in plcmts weighed heavy on the mkt! So the mkt is back in a “trading range” mode – still supported by tight supplies but not so much with strong demand like in the spring & Summer!

 

DEC HOGS

Just as the 10-20-23 Cattle-On-Feed was pivotal for the cattle complex, so was it so for the hogs as well – as the Hogs inability to follow cattle down on their limit-down day was very significant! That bullish divergence led to a seasonal low in Dec Hogs – followed by a impressive $8 rally (65.50 – 73.50)- back into the middle of its 6-month trading range! Further rallies will be hampered a weak cash mkt & higher 4^th Qtr Production! However, the recent plummet in the US Dollar will help exports – partially offsetting that pressure!

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