AgMaster Report 02/05/2024

MAR BEAN

Mar Beans started the week out down 10 cents off Argentine rains & a stronger US Dollar but quickly reversed higher for a 15 cent rally interday – due to strong exports! The Monday Inspections came in at 1.4 MMT while Corn has a flash sale to Mexico! As well. The Feb WASDE Report is due out on Thur 2/8/24 at 11am & evening up in front has already started! The Chinese Lunar New Year begins this Saturday & has also introduced some uncertainty into the mkt!  Weather is still a factor in South America as crop estimates for Brazil & Argentina are still drifting lower! The net Fund short open interest in beans is the highest since 2019 & the mkt’s $2.00 drop since last Summer has already dialed in a lot of bearish fundamentals! The DJI is hovering a record levels (over 38,000) – despite all the IR increases in 2023 – with 3 IR CUTS expected in 2023! A definite positive for all comods!

 

MAR CORN

For the past 3 weeks, Mar Corn has been locked in a tight 15 cent range (438-453)! A lot of the bearish news including slack exports & adequate supplies have already been dialed in by the mkt’s $2.00 break since last Summer! US Corn is the cheapest anywhere & the short open interest in Corn is close to a record at over 280,000 contracts! The DJI is sitting at record levels in the mid 38,000 level – a plus for all Commodity mkts! Today, Mexico bought 155,000 MT of US Corn in a flash 8am sale!  The Fed said over the W/E that it plans 3 IR cuts starting in the Spring – which will devalue the US Dollar – helping US exports! Any bullish spark in the mkt place would lead to a heavy dose of short-covering! EXPORTS should be on the way – given corn’s relative cheapness in global mkt!

 

MAR WHT

The fundamental news for the wht complex has been negative in the past week – as weak Russian wht prices have been an anchor around the neck of US wheat futures – & bearish HRW rains in the Southern Plains have kept a blanket over prices! Much like its sister mkts, corn & beans, Wht could use a good dose of Chinese buying – like we witnessed a few months ago! Prices of all 3 mkts – beans, corn & wht are $2.00 off the Summer highs so prices should be cheap enough to generate some solid demand!

 

APL CAT

Dwindling supplies have been continually supporting Apl Cat’s Bull run which began in early Dec & has extended to an $18 rally (166-184) – forecasts for declining production in the 1^st three quarters of 2024 have underpinned the mkt – & they were validated in spades in last Wed’s semi-annual Cattle Inventory Report which reported the lowest cattle inventory since 1951! That report ignited a $3.00 rally in Apl Cat – which in turn rendered the mkt  overbought today & it has corrected accordingly! But very tight supplies & improving domestic & export demand should rally the mkt into the Spring!

 

APL HOGS

Apl Hogs have had their own little “Bull Run” since 1-2-24 – spanning $14 (72-86) – for an impressive 20% gain in January! But this contract has not been the beneficiary of the much lower supplies that cattle has – & as well has had export issues with China as they have recently undergone a herd liquidation! And especially with the US $’s recent 150 pt rally, export woes have emerged & the mkt is in the process of correcting/consolidating its stunning January rally! However, with China’s recent economic stimuli & better domestic demand into the Easter holiday, both domestic & foreign appetite for our pork supplies should increase

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