NOV BEANS
LOW PRICES CURE LOW PRICES! It always happens! And now we’re witnessing this phenomenon one more time! The bearish 8-12-24 USDA REPORT pegged Bean yield at 53.2 BPA & production at 4.589 BB – both records! However, accompanying the large crop are 4-yr low prices – which establish US Beans as the cheapest in the Globe! This has resulted in a powerful surge of export business – already this week, 4 FLASH SALES of beans to China & Mexico! And a US $ on 7-month lows has enhanced the sales. As well, domestic Biodiesel demand is very strong! So, we see the $9.50 low created after the report – as holding this week is the well-respected PRO FARMER TOUR – that we widely expect will confirm the AUGUST WASDE yields issued last Monday! From here on out, we expect a plentiful flow of exports – cheapened even more by a declining US DOLLAR!
DEC CORN
The 8-12-24 AUGUST WASDE was already friendly for Corn with a record yield of 183.1 BPA producing a crop of only 15.147BB – the same as July & under 2023! The reason was increased demand & 700,000 fewer acres! As well, a lower US Dollar has further greased the slide for better exports to the US – already the cheapest game in town! And lower non-US production across the globe is down to drought & disease! The result was lower US & foreign carry-out! $4.00 corn is a 4-year low & seems to be fair value for Dec Corn – whose export potential should be quite high thru harvest! Adding “frosting to the cake” is a very favorable MACRO environment – with the DJI near record highs with at least 2 rate cuts expected by year-end!
DEC WHT
Dec Wht received upside support from a # of different factors – decreased production from Germany (down 13%), France (lowest in 8 yrs) & Russia due to drought! Also, a Canadian Rail Strike is looming & the US DOLLAR is plummeting! Monday Inspections are running 25.9% over 2023! Winter Wheat is 96% in & HRS is 31% harvested (ly-36)!
DEC CAT
A complete implosion by Dec Cat – as it scored NEW 2024 LOWS –down over $3.00 – in response to increased production, waning demand as we approach Labor Day W/E & fears that the upcoming AUGUST CATTLE-ON-FEED due Friday at 2pm would reflect a large increase in placements (4-5%)! The huge disparity between beef & pork in the supermarket has finally translated into an inversion with plummeting beef & steady pork as the latter assumes upside leadership in the meats!
DEC HOGS
The BULLISH DIVERGENCE of the Dec Hog chart juxtaposed against the Dec Cat chart speaks volumes about the two contracts – as the hogs hold relatively steady as the cattle collapses! The end of the grilling season (LD W/E) as well as general inflation is broadly hurting meat demand – but the cost-conscious consumer is not totally abstaining – but instead opting for the less expensive pork cuts!More By This Author:AgMaster Report – Tuesday, July 23
AgMaster Report – Tuesday, July 16
AgMaster Report – Tuesday, July 9