AgMaster Report 11/22/2023

JAN BEANS

Like all weather markets, Beans went up on the hot & dry forecast for N Brazil, then corrected 70 cents last week when rains were forecast for last W/E – then rallied back 60 cents this week when the rain coverage was disappointing & mkt pundits predicted a return to “hot & dry” by the end of November! Also, S Brazil has been way too wet! As well, China has been aggressively buying our beans – almost every day! And the US Dollar has plummeted 400 points since early Oct – very favorable to our exports! The stock mkt has rallied nearly to its 2023 highs – as recent economic #’s suggest no more interest rate increases this year! All of these are providing substantial tailwinds for the bean complex that has already been fortified by excellent domestic demand!

 

DEC CORN

Dec Corn continues to muddle along in a sideways, congestion pattern that has confined the mkt since mid-August! Currently truly a weak sister to the resurgent bean mkt! But the mkt is $1.50 off its Summer highs & is the cheapest corn on the world mkt – especially of late with the collapse in the US Dollar! Mexico has been a steady buyer & domestic demand is very good! We feel the 15 billion bushel crop is in the mkt & that improving exports & deteriorating South American weather will eventually rally corn decisively from its  harvest lows!

         

DEC WHT

Dec Wht has been locked in a 60 cent range (540-600) for 2 months – in dire need of a “Bullish Narrative” to lift it out of its doldrums! Increasing estimates of Ukraine’s grain harvest, more chances for rains in the Southern plains & an improvement in Winter Wheat conditions have recently pressured the mkt – as has an improving an Australian Wht crop! Fresh exports & post-harvest bean/corn rallies would provide a welcome boost to this range-bound mkt!

 

DEC HOGS

The last thing the hog mkt needed was bearish news out of China but that’s exactly what it received this week – as the Superpower announced its hog herd was “too large” due to higher sow productivity & lower consumer demand! Immediately, US hog cash & cut-outs dropped – pulling Dec Futures with it today! Already, higher US pork production & hog weights were weighing on the mkt! Together, these negatives combined to more than offset the better pork demand expected ahead for the upcoming holidays!

 

DEC CAT

Last Friday’s November Cattle-On-Feed Report was a little friendly with placements up 3% (exp -5-6) but on top of the Oct COF Report’s 6% increase, definitely was validating a new trend of an expanding cattle herd – not long after setting record prices in September! Demand took a double hit – as consumers finally balked at record high prices and the seasonal preference for pork/turkey in front of the holidays took hold!

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