NOV BEANS

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LOW PRICES CURE LOW PRICES! It always happens! And now we’re witnessing this phenomenon one more time! The bearish 8-12-24 USDA REPORT pegged Bean yield at 53.2 BPA & production at 4.589 BB – both records! However, accompanying the large crop are 4-yr low prices – which establish US Beans as the cheapest in the Globe! This has resulted in a powerful surge of export business – already this week, 4 FLASH SALES of beans to China & Mexico! And a US $ on 7-month lows has enhanced the sales. As well, domestic Biodiesel demand is very strong! So, we see the $9.50 low created after the report – as holding this week is the well-respected PRO FARMER TOUR – that we widely expect will confirm the AUGUST WASDE yields issued last Monday! From here on out, we expect a plentiful flow of exports – cheapened even more by a declining US DOLLAR!

DEC CORN

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The 8-12-24 AUGUST WASDE was already friendly for Corn with a record yield of 183.1 BPA producing a crop of only 15.147BB – the same as July & under 2023! The reason was increased demand & 700,000 fewer acres! As well, a lower US Dollar has further greased the slide for better exports to the US – already the cheapest game in town! And lower non-US production across the globe is down to drought & disease! The result was lower US & foreign carry-out! $4.00 corn is a 4-year low & seems to be fair value for Dec Corn – whose export potential should be quite high thru harvest! Adding “frosting to the cake” is a very favorable MACRO environment – with the DJI near record highs with at least 2 rate cuts expected by year-end!

DEC WHT

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Dec Wht received upside support from a # of different factors – decreased production from Germany (down 13%), France (lowest in 8 yrs) & Russia due to drought! Also, a Canadian Rail Strike is looming & the US DOLLAR is plummeting! Monday Inspections are running 25.9% over 2023! Winter Wheat is 96% in & HRS is 31% harvested (ly-36)!

DEC CAT

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A complete implosion by Dec Cat – as it scored NEW 2024 LOWS –down over $3.00 – in response to increased production, waning demand as we approach Labor Day W/E & fears that the upcoming AUGUST CATTLE-ON-FEED due Friday at 2pm would reflect a large increase in placements (4-5%)! The huge disparity between beef & pork in the supermarket has finally translated into an inversion with plummeting beef & steady pork as the latter assumes upside leadership in the meats!

DEC HOGS

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The BULLISH DIVERGENCE of the Dec Hog chart juxtaposed against the Dec Cat chart speaks volumes about the two contracts – as the hogs hold relatively steady as the cattle collapses! The end of the grilling season (LD W/E) as well as general inflation is broadly hurting meat demand – but the cost-conscious consumer is not totally abstaining – but instead opting for the less expensive pork cuts!

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