MAR BEANS

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Mar Beans had a terrific start to this week’s trade Mon -rallying nearly 40 cents off a re-opening of China, Argentine dryness & the US Arctic cold blast! But alas, the rally didn’t hold, as the mkt closes off its lows – leaving an ominous “spike top”! But today, the mkt resumed its up – surging toward the 6-month highs scored yesterday! We feel a combination of bullish factors have developed – that could act as a springboard to higher prices in 2023 – even from the already historically high $15.00 level! A plummeting US Dollar & a re-opening of China should improve the export outlook, a drought-ridden Argentina could substantially reduce the South American Crop and a resilient economy might stave off a recession – giving a boost to all commodities! And the 6-year low global stocks continue to underpin the mkt!

MAR CORN

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Recent news out of South America has FOB premiums for Argentina, Brazil & the US Gulf at parity for Feb delivery! Apparently, the recent plummet in the US Dollar of nearly 10% since late Sept is already having a benign impact on the recent dismal US Corn Exports! That coupled with China’s easing Covid restrictions foretells a badly needed uptic in US grain exports in the 1^st Qtr of 2023! That coupled with a depleted S/A crop due to Argentina’s extreme drought injects some positive supply/demand fundamentals into the corn mkt – which remarkably has held just under $7.00 despite almost non-existent exports & the re-opening of the Russian-Ukraine Corridor! Indeed, the 6-7 year low level of carry-out continues to support the mkt at historically elevated prices – and they may not be high enough entering 2023 should normal exports resume & the Argentine dryness worsen!

MAR WHT

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Given the $5.00 drop in Mar Wht since Mid-May & considering the damaging weather with definite winterkill happening after the last week’s arctic blast & the ongoing drought in the Mid-Central plains, It certainly feels like the contract has cratered – looking to rally into the Spring – possibly coat-tailing a bullish move from corn & beans! Russia has had a vice grip on prices – with their record crop & their low-ball prices in the global export mkt! but they may have been factored into the price structure! And Egypt continues to active in the world mkt!

FEB CAT

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A tightening supply outlook continues to underpin the mkt – a shift in US beef production from the 4^th Qtr to the 1^st Qtr of 2023 show a near-record decline – and this major fundamental continues to support the mkt on breaks! Plus, the spate of USDA reports last Friday – the Cattle-on-Feed Report & a Pig Crop Report both showed a pronounced decline in livestock populations – this combined with robust holiday demand has maintained the Feb Cat contractas the upside leader in the meats! Adding frosting to the cake was the recent Arctic Blast – that increased death loss & reduced weight gain in the cattle herds!

FEB HOGS

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Oftentimes, what a mkt is unable to do when it should – is the most telling! Case in point Feb Hogs – which has had a remarkable surge to the very top of its recent range off two favorable USDA reports last Friday, an historic Arctic Chill & a raging new contract highs in it sister mkt Feb Cat! But disappointingly, follow thru was lacking as a weaker pork cut-out led the futures to $2.00 correction -off burdensome production increases – going into early 2023! In addition, robust Holiday Demand will certainly slack off into early January!

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