Ag Master Report -Tuesday, Nov.24


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A full-fledged weather mkt has broken out in the grains – as the mkt repeatedly adds & subtracts “weather premium” from its price structure! Adding to the volatility is the psychological $12.00 level – which 3 times, the mkt has failed to breach! The driest Nov/Dec in recent memory for Brazil & Argentina has traders fearing a full-fledged drought for the world’s largest bean producer! Add to this further “dry issues” in Russia, the Black Sea & the US Plains – and ending stocks – already at 4-5 year lows – are threatened to be pared even further! Plus, world demand for our grain has been immense! Finally, the Macros are helping as well – a vaccine-supported DJI & a lower trending US Dollar are adding underlying support!!DEC CORN

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Dec Corn was greeted this morning with two pieces of “good news” – an 8 am flash sale of 334,000mt to an unknown –and the announcement of a 3rd vaccine to fight Covid. Less Covid – means more economic growth – which means more driving & ethanol usage! Already carry-over stocks have diminished to 4-5 year lows – because more is going out the front door – than coming in the back! There is simply no margin for error in either hemisphere for corn production! El Nina is attacking S/A production now – and fast-forward 6 months – what if it also turns up dry in the US? Also, a slumping US Dollar is benefitting our exports! But have we already rallied to far? Not really! Dec Corn is currently at 4.25 – still in the bottom 20% of its 10-year range ($3.00 – $8.00)! Will China keep buying? Most probably! Their corn stocks have been depleted by flooding & an aggressive hog-herd rebuild – and US Corn is not only the cheapest but the only global supply until late Feb! STRAP IN!!


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