Ag Master Report - Thursday, Sept. 10

NOV BEANS

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After a near-vertical $1.10 ascent (8.65 -9.75) since the Aug Crop Report – fueled by a “flash drought” & stellar exports – you’d think the mkt was due for a correction – with the Sept WADSE REPORT coming Friday at 11 am & harvest right around the corner! But the Nov bean contract has stubbornly refused to back off – as of today, closing higher 11 consecutive days! Even an as-expected crop rating decrease of 1% – out on Tues didn’t trigger profit-taking despite US-China political tension, Phase 1 is alive & well with almost daily Chinese purchases! This action indicates impressive underlying strength in a bean complex still historically cheap!!

DEC CORN

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Because of the timing of the flash drought – occurring in August during soybeans critical pod-setting period, Nov Beans have been the upside leader with their $1.10 rally with Dec Corn being a follower with a $.45 cent upmove (320-365)! Nonetheless, the contract is no slouch with solid Chinese exports & an upside gap left a few weeks ago! Plus, China’s corn crop is in jeopardy due to a series of typhoons battering their farmland! Also, corn’s carry-out is not near as plentiful as beans – so, for instance, a 177 yield could bring stocks down to a 4-year low. Corns Achilles Heel has been slack ethanol demand due to COVID reducing driving – but a continued economic resurgence could “right that ship”! Finally, like beans, corn is coming off 10-year lows – and that coupled with a slumping dollar – makes it very attractive to our trading partners! With the Sept WADSE Report due out Friday at 11 am, we will likely see back-and-fill action until Friday!

DEC WHEAT

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After vertical 70 cent up (500-570), Dec Wht has corrected 25 cents (570-545) due to a plethora of fundamentals – improving Argentine & Australian wt crops, active exporting from the Ukraine & Russia, a recently rallying US Dollar & abundant global carry-out with the Sept USDA Supply & Demand Report due out Friday morning, the mkt will likely sideways trade as traders even up in front of the report!

OCT CATTLE

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Oct Cat has had a hard time holding a rally of late as increased average weights and daily slaughter have overcome flagging consumer demand – slowed by a sluggish re-opening of the US economy! This has resulted in lower beef & cash prices! The mkt is hopeful that post Labor Day Demand will return soon to the mkt place – as more & more restaurants re-open!

OCT HOGS

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While Oct Cat has struggled with lackluster demand, Oct Hogs have thrived on robust demand – mostly due to the “export component” from prodigious buying by China & Mexico! This has managed to more than overcome adequate pork production – leading to a surge in Pork Cut-out & the bullish chart action above! The technicals are very impressive with 1 & ½ upside gaps still left unfilled!