AgMaster Report 12/28/2023

MAR WHT

Holiday mkts are in full swing – plus a lot of evening up in front of the month-end, quarter-end & year-end this Friday! The final 2 mkt weeks of the year are indeed the slowest of the year – characterized by low volume & potential high volatility! Macro factors lifted the wht on Tues as a Russian ship was attacked by Ukraine fighter planes & 2 shipping stations along the US/Mexican border were re-opened! Those along with disappointing rains in the S/W plains spurred a 20 cent rally in both Chicago & KC Wht – today the mkt is correcting in a turn-around Wed mode! But the chart action is very positive since late Nov’s 90 cent rally – as the sheer cheapness of US wht has finally attracted much-needed export interest!

 

MAR BEANS

The main focus for the Bean Complex going into 2024 is of course rain for North Brazil & was it enough! The mkt action suggests that rains have fallen but they were disappointing – only partially alleviating the drought conditions! Private forecasters have lowered their estimates of Brazilian Bean Production to 153 MMT (USDA – 161)! The USDA has forecast a bean crop of 4.1 BB – about the same as last year – so the Brazilian drought will definitely lower bean carry-out! At the same time, Bean demand – both domestically & export-wise is on the rise! There is no margin for error entering the 2024 US planting & growing periods! Plus, the outside mkts are very supportive with DJI at record highs & the US Dollar having plummeted 600 points in 7-8 weeks – making the US even more competitive on the global mkt even today with its sister mkts corn & wht under  pressure, Mar Beans are up on the day!

 

MAR CORN

Mar corn’s biggest challenge has been a lack of export demand but all current conditions suggest that they will improve dramatically – for several reasons! First, US Corn is now the cheapest anywhere in the world. Second, Mar Corn is a whopping $1.50 off its 2023 Summer highs! Third, the US Dollar has plummeted over 600 points in the past 2 months making an already cheap commodity even cheaper on the world mkt for our importing partners – China & Mexico! Fourth, the current railway impasse on the US-Mexican border has been resolved! And finally, the US Stock Mkt is currently on all-time highs at 36,500 despite numerous interest rate increases in 2023! And that’s beneficial for all commodity mkts as a “rising tide floats all boats”!

 

FEB CAT

Despite a bearish Cattle-On-Feed Report issued last Friday at 2pm, Feb Cat closed up over $2.00 after opening lower – a classic display of bullish divergence! It speaks volumes to the fact that Feb Cat scored a seasonal contract low on Dec 7 & now looks to rally into the January off improving domestic & export demand!

 

FEB HOGS

Feb Hogs responded to a second consecutive bearish Pig Crop Repot with a down day Tues but rebounded today! The lows of late Nov & early Dec around $66.00 may end up holding as the mkt has dialed a bigger supply & slack exports! The $20 plummet since March has seemed to factor in the bearish supply/demand fundamentals! At the current depressed price levels, demand should surface after the first of the year!

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