AGMASTER

William D. Moore at the Chicago Board of Trade

SEPT BEANS

Greenhouse conditions continue for the 2020 row crops – with ideal weather for the crops “maturity window” & record yields widely predicted!  The good/excellent crop ratings went up to 74% – 13% over the 10-year average! Only robust China exports have been able to offset the bearish weather – resulting in a “grind-down” mkt vs a “free-fall!  Wed at 11am the USDA issues its monthly supply & demand numbers – although pundits feel the Sept Crop Report will be more reflective of actual yields!  On 8/15/20, the US & China are meeting to review Phase One! A big positive especially in light of the recent friction between the two behemoth trading partners.  Macros mkts support! A lot of “bad” is already dialed in!!

SEPT CORN

Corn doesn’t have many friends out there – certainly not the China Demand that beans enjoy – and domestically ethanol consumption has waned as the economic recovery has stalled out due to the Covid resurgence! And the crop ratings – though declining 1% to 71% are historically high at 10% over the 10-year average!  However, the mkt was already very cheap at 10 year lows before the 2020 crop was planted & many of the bearish fundamentals are dialed in! After all, “how much can you beat a dead horse”? The US Dollar has been in a free fall & the DJI is only 1500 points off its pre-Covid highs! So we wouldn’t push the short side! The crop is far from made! Look for a turn-around signaled by the mkts inability to go further down on bearish news!

SEPT WHT

Today Sept Wht was able to “stop the bleeding”  stabilizing after a 60 cent drop (550-490). The mkt was supported by another  Egyptian tender & a 4% decline in the gd/ex rating of Spring Wheat! Also, the storms that ravaged parts of Iowa’s crops caused some short-covering.   As well, the USDA WADSE Report on Wed had some shorts taking profits! Sept Wht has resisted the new-contract-low-action of KC & Minn Wht as well as the increased production in Russia & Australia! The mkt will most probably consolidate in front of the USDA’s Supply & Demand Report Wed!

OCT CAT

Impressively, Oct Cat has maintained a healthy premium to cash while slaughter has come in under expectations & beef demand has at the same time has exceeded expectations! The result has been a technical upside break-out – with the contract reaching its highest levels since early March! Should the economy resume its rebound later in the 3rd Quarter, the rally could be sustained!

 OCT HOGS    

One step forward & one step back – the ongoing frustrations of a trading range Mkt – trying but failing to escape its consolidation! Yesterday, on the back of solid pork demand, Oct Hogs surged $2.00 – only to surrender all those gains today! Chinese Demand has been robust but not quite enough to offset burdensome daily slaughter #’s! Today’s action was particularly disappointing in the face of the large gains scored by Oct Cat!

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