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 lengthy 3-day holiday W/E brought more rain than expected to N Brazil – resulting in a gap-lower opening & a solid down-day – bringing Mar Futures to the lowest levels since late June! Today, the mkt in familiar “turnaround Tuesday” fashion, has reversed course – indicating the down may have been overdone yesterday! Private Brazilian Crop estimates keep falling – now between 145-150 MMT – the US Dollar has fallen 500 points off its highs, exports are improving & the DJI sits on record highs! Carry-out did not get a boost from the US 2023 crop – unchanged from 2022! There is no margin of error for beans in 2024 – should production slip in either/both hemispheres!
Mar Corn broke thru the 470 support level yesterday – in sympathy with a plummeting bean mkt which was pressured by Brazilian rain! Conventional wisdom says the current carry-out is adequate to meet the current demand needs! But with the US Corn the cheapest anywhere & with the current weakness in the US Dollar looking to continue due to predicted lowering of IR’s in 2024, we foresee a surge of exports in the 1st Quarter which will force the massive fund shorts to exit their positions -fueling a sizeable rally!
Mar Wht’s impressive 90 cent rally in Dec (560-650) has stalled out due to improving weather in the Winter Wheat Belt, slack exports & spill-over pressure from the Brazilian Rains! Russia’s inundation of cheap exports into the wht complex is still keeping it under wraps – even after an impressive buying spree by China – late last year!
Winter-weather issues, a forecast lower production for the first 3 Qtrs of 2024, improving demand & better exports all contributed to the mkts upside emergence from its 10-day congestion – which seems to corroborate the seasonal lows scored on 12/7/23 at 162.40! The $35 break in Feb Cat from mid-Sept seems to have been enough to attract substantial demand both domestically & export-wise!
Several headwinds including adequate supplies, higher than normal Midwest Hog Weights & paltry exports combined to push Feb Hogs to new contract lows yesterday! The same day Feb Cat surged over $2.00! Very strange, divergent mkt action for the two competing meat products! But China’s virtual exit from our export mkt due to their oversupply has been very damaging to our hog mkt – as domestic demand has failed to take up the slack from China’s absence!Questions? Ask Bill Moore today at 312-264-4337