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
Since the beginning of 2024, a perfect storm has descended upon the grain complex in the form of plentiful rain falling in N Brazil – enhancing their crop potential & a dearth of exports – need to shave the stockpiles! So, the mkt has had a sizeable 2-day down – however, evening-up may be on the horizon this week as the January WASDE is issued this Friday 1-12-24 at 11am! The Fund short open interest is the largest since the pandemic & US Corn is the cheapest anywhere! The mkt is quite oversold & exports should start to emerge!
Needless to say, 2024 has begun with long fund liquidation due to better tha expected rains in North Brazil & an absence of any 8am flash sales to China/unknown for the last few weeks! Adding to that is a bearish technical pattern – which started last Tuesday 1-2-24 with a gap-lower opening at 8:30am! Today the Crude oil is adding to the pressure – down $3.50! The USDA will update the carry-out & South American production this Friday at 11am -it will be interesting to see how they adjust the Brazilian bean production the rains have certainly helped the Brazilian bean crop but how much! The export potential is certainly greater now at these lower prices & the rally potential is heightened due to the sizeable short open interest – subject to large short-covering on any kind of price-friendly news!
Last week’s 30 cent rally (590-620) has stalled today as improving weather in the Western Plains & the Black Sea has improved the Winter Wheat Outlook globally! As well, last weeks rumors of increased Chinese interest in US wht have not been confirmed! Further, spillover pressure from corn & Beans has added to the downward momentum! The mkt has forfeited all of last week’s rally gains – as it awaits the USDA January Supply & Demand Report on Friday!
A $10 rally in Feb Cat (163-173) – starting in mid-Dec – spawned by cold climes & winter storms looks to have run its course today – as the mkt has experienced an intra-day $3.00 downside reversal! The mkt apparently had built in the weather & exhibited the familiar “buy the rumor – sell the fact” pattern! But today the mkt is back higher – driven by decent demand & more wintry weather crisscrossing the Midwest!
Since the roller-coaster volatility exhibited last week where the mkt plummeted $4.00 on Tues – then rallied $4.00 on Thur, Feb hogs have rallied an impressive $8 (65-73) – confirming that seasonal lows were scored last week just under 65! A combination of wintry weather- adding to death loss & reducing weight gains & improving demand -has catalyzed the turn-around!Questions? Ask Bill Moore today at 312-264-4337