Jul 22, 2014
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Market Watch

RSS By: Alan Brugler, AgWeb.com

Alan Brugler is the President of Brugler Marketing & Management, and the primary analyst and advisor.

It’s Beginning To Look A Bit Like Christmas

Dec 19, 2008
Trading volume is down, market players are reducing their holdings, and flights out of Chicago are booked. The holidays appear to be in full force. Wheat has been a beneficiary. It was the big gainer for the week. KC got the publicity, with talk about winterkill in the Plains HRW crop. SRW in Chicago had the biggest gain, however, due mostly to trapped shorts trying to buy their way out of the contract before year end. With thin volume, they were moving the price. A weak dollar aided gains early in the week, but a sharp rally in the dollar on Friday also coincided with a sell off in the wheat market.
 
Below is a table showing the net weekly change of selected agricultural futures contracts:
 
Market Watch
 
 
 
 
 
 
 
 
 
 
 
Wkly
Wkly
 
28-Nov
5-Dec
12-Dec
19-Dec
Change
% Change
March Corn
$3.66
$3.06
$3.73
$3.81
0.07
1.97%
March CHI Wht
$5.64
$4.76
$5.13
$5.63
0.50
9.80%
March KC Wht
$5.82
$5.03
$5.38
$5.83
0.45
8.36%
March MGE Wht
$6.11
$5.51
$5.90
$6.25
0.35
5.97%
Jan Soybeans
$8.83
$7.84
$8.54
$8.68
0.14
1.67%
Jan Soy Meal
$254.30
$238.30
$257.70
$267.50
9.80
3.80%
Jan Soy Oil
$33.34
$28.93
$30.92
$30.60
0.32
-1.03%
Dec Live Cattle
$87.38
$81.55
$83.32
$86.10
2.78
3.34%
Jan Feeder Cattle
$91.70
$86.65
$87.17
$93.50
6.33
7.26%
Feb Lean Hogs
$67.03
$64.20
$62.28
$61.70
0.57
-0.92%
March Cotton
$48.00
$41.52
$43.34
$45.09
1.75
4.04%
March Oats
$2.17
$1.99
$2.13
$2.19
0.06
2.62%
Jan Rice
$13.35
$14.13
$14.90
$14.89
0.01
-0.07%
 
Cattle futures had a sharp short covering rally on Friday ahead of the USDA report. The USDA Cattle on Feed report on Friday afternoon showed November placements at 95.2% of year ago, with marketings at 90.6%. A light marketings numbers had been expected, due to the weight breakdown of cattle available for the month. Marketings were very close to the placed against figure, confirming the very current condition in the country. The net result is 11.345 million head on feed as of December 1, 93.77% of year ago.
 
Hogs were down 57 cents for the week. Sliding pork cutout values were the problem, limiting packer interest in paying up for hogs. The pork carcass cutout was up a thin dime on Friday, to $57.92, but had been at $59.28 on Monday. There was some interest from packers in accumulating hogs, in order to build up a little inventory ahead of the holiday.
 
Corn prices were up 7 cents per bushel for the week, despite giving up 8 ¾ on Friday. The weaker dollar was supportive early in the week, and cold weather was also seen as perhaps extending feeding times a little bit and using more corn. Export sales continue to be an Achilles heel for the bulls. Corn use for ethanol is also suspect due to gasoline prices dropping faster than ethanol.
 
Soybean futures were up 14 cents, boosted by a 3.8% advance in soybean meal futures as the cold weather expanded. USDA’s cut in projected DDG production the prior week firmed up soy meal prices, and technical action was also bullish as prices rallied through the 18-day moving averages. Soy oil held back the complex a little bit. Bean oil stocks continue to be burdensome, and the market needs biodiesel demand to whittle them down. With crude oil dropping to the $34 neighborhood that was a tough argument to sell. February heating oil (diesel) futures posted new lows for the move on Thursday, keeping pressure on the bean oil. The rally in the dollar on Friday was also not bullish.
 
Cotton futures jumped 4% for the week despite yet another poor weekly export sales report and a total absence of the main world buyer (China) from last week’s export business. Part of the rally was mechanical. A large LDP encouraged producer pricing on up days, with resulting commercial hedging and spec buying. The weak dollar early in the week also was seen as potentially stimulating buying interest overseas.
 
Market Watch:  The cattle market will begin the week reacting to the COF report. Cash trade will have an unusual pattern, with Christmas falling on a Thursday and neither buyers nor sellers much interested in working on Friday. The futures markets will be closed on Thursday, but open on Friday in an orphan session. USDA will issue a Cold Storage report on Monday afternoon. The monthly Census Crush and Cotton Consumption reports were delayed from this past week until the 23rd, Tuesday. Friday will mark the last trading day for January grain options, as well as heating oil and RBOB gasoline.
 
There is a substantial risk of loss in futures & options trading. Past performance is not necessarily indicative of future results.
 
Copyright 2008 Brugler Marketing & Management LLC. Reproduction or rebroadcast of any portion of this article without written consent of Brugler Marketing & Management LLC is strictly prohibited. Call 402-697-3623 for information on Ag Market Professional or SRR subscription information or visit the web site @ www.bruglermktg.com.
 
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