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
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!
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!
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!
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 1st 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 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 increaseQuestions? Ask Bill Moore today at 312-264-4337