AgMaster Report 09/10/2024

DEC CORN

Dec Corn has carved out seasonal lows in the past 3 weeks due to several fundamental factors: The record yields after much widespread publicity over the last 3 weeks have finally been baked into the price structure – the 4 year lows at $4.00 seems to be cheap enough to attract demand – cumulative exports are running 35% over 2023 & justifiably so as US Corn is the cheapest anywhere – the US Dollar has been plummeting make our exports even cheaper – the Macro environment is favorable with at least 2 IR cuts due by year-end & finally, Brazil is in the initial throes of a major drought which has already delayed their planting as well, major non-US countries are having production issues – reducing global carry-out!

 

NOV BEANS

Nov Beans bottomed out shortly the 8-12-24 USDA REPORT – predicting a record 53.2 bpa yield! The low was confirmed shortly thereafter when the Pro Farmer Tour raised their estimate above the USDA to 54.9 bpa but the mkt was unable to make new lows & in fact began its 70 cent rally (960-1030)! Since then, the mkt has corrected in anticipation of the upcoming harvest & the Sept WADE due this Thursday! The potential drought in Brazil –  should it extend to late September – will be very impactful on prices to the upside! As well, the hot/dry period engulfing the central farm belt the last few weeks has taken the top end off the bean yields! Despite record US production & yields, shortfalls due to drought elsewhere in the globe have kept carryout reasonable & at 4-year lows, prices will be sensitive to supply disruptions anywhere starting with the impending drought in South America!

 

DEC WHT

Much like corn & beans, Dec Wht has also cratered with a 60 cent rally (520-580)! Today, prices are slightly higher – boosted by reports the Russian wheat harvest – to date – is reflecting lower yields than 2023! The bugaboo is that Russian Export Prices are $.60 lower than US FOB prices – which limits how far US prices can rally – but that should change once their harvest is over! Wht export inspections came in at 586,687 MT & cumulative inspections are 33% over last year! It appears that across the board, 4-yr lows are cheap enough to begin to attract significant export demand!

 

DEC CAT

Yesterday, Dec Cat staged a very powerful – plus $2.00 – rally to begin the week reversing last week’s weakness – on the highest daily trading volume weeks! Tailwinds included a very strong rally in the US stock mkt & beef imports in July running 26% over 2023! The mkt is starting to grapple with how much demand is still available with the “outdoor grilling season” winding down!

 

DEC HOGS

Since mid-July, Dec Hogs have rallied $12 (62-74) – establishing Hogs as the new upside leader in the meats! Even with the post-Labor Day demand waning, pork is grabbing the lion’s share simply because its so much cheaper than beef in your local grocery store – not lost on the cost-conscious consumer already strapped by high inflation! However, hog weights & production are due to rise with cheaper corn & cooler temps!

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