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Supply Bulls vs Demand Bears! However, moderating temps have weakened The Bull’s position while disappointing US/China trade talks have strengthened the Bears Position – leading to a steady erosion of prices! The August 12 USDA Crop Report should Provide some clarity on the “real” acreage situation!
FACTORS IMPACTING THE MKT
There is still much uncertainty surrounding the US Corn Crop – including prevent acres, yield drag & weather anomalies such as “returning hot & dry” & “early frost”! We’re anxious to see the USDA’s 8/12/19 report & their take on corn & beans acres!!
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A $130 rally since early May (805-935) off historic planting delays has given way to a cooler, wetter forecast – forcing a 50 % retracement in price (935-875)! That’s not unreasonable chart action – and implies the uptrend is still intact– especially with so many variable fundamentals coming “down the pike” – including updated yields & acreage #’s & any weather threats! Even though crop ratings improved slightly last nite, they are still nearly 20% under 2018! Lastly, Bean prices even after their earlier rally, still reside in the bottom one-third of their 10-year range!
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The Wht mkt has had some relevant info out in the past week:
However, key mkt factors really impacting the mkt would be slack exports (US price too high) and its slumping sister mkts – corn & beans – resulting in a 9 cent weekly loss -so far!!
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Oct Cat has been the beneficiary of several positive fundamentals of late- a friendly Cattle-on-Feed Report, a much-larger-than-normal 4th-1st Qtr production decrease, the best seasonal demand of the year (barbeque) & a large discount to cash! But all of that couldn’t hold the mkt up against very disappointing results from the most recent US/China trade talks in Shanghai – resulting in a mkt plummet – currently $3.00 off its recent highs!
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Oct Hogs have plunged to limit-down today on the heals of very poor trade talks in Shanghai – all told, the contract has dropped $11 in only 7 trading days! It simply illustrates the extreme importance exports play to a hog mkt – still over-burdened with supplies! Not only have potential exports off a possible US/China accord dried up but the SARS epidemic in Asia hasn’t translated into additional US exports either – very disappointing!!
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