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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.

Across the Board

Dec 23, 2010

 

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Market Watch

December 23, 2010

Across the Board

Ag commodities were up across the board this week with only a few that were lower. Energies were higher and stock market indices finished higher for the week as well. Soybeans, soymeal and soyoil were pushing the cart today with corn following suit and the rest of the ag sector not doing much aside from cotton which tanked to limit down on the front month.

 The soybean complex was up 3.91% for the week.  Meal was up 3.51% for the week, and soy oil was up 4.54% after the green light from the passing of last week’s tax bill. The bureau of meteorology stated that the La Niña pattern has peaked out and there will be a gradual return to more normal precipitation. Weather concerns in Argentina earlier in the week boosted soybeans and that rally continued through the week with extreme estimates of revisions lower in Argentine production. Export sales were much better than last week at 827,810 MT and in line with trade estimates. The November U.S. Census Bureau oil mill reported the soybean crush at 154,993,717 bushels yielding 11.43 lbs of oil per bushel at 1.771 billion pounds which was in line with estimates.

Corn prices were up 2.93%, the highest intraday close since July 2008 on the continuous front month futures chart. That was just a few weeks after the $7.65 lifetime high in June of 2008. Prices closed solidly above the 61.8 Fibonacci level on the weekly continuation chart.  Corn strength is fueled literally by demand for ethanol and DDGS.  Poor quality wheat in Australia could compete as feed against DDGS to China. Total DDGS exports are expected to reach 9 MMT in 2010. Ethanol stocks built up slightly in the most recent reporting week, but the corn grind continues at a 4.9-5.0 billion bushel annual pace. Feed and export use are likely slowing at the margin, but feed use is a residual number and USDA will have a better handle on it after it sees all of the Grain Stocks numbers. Corn exports as of December 16th were 18 percent above the previous four week average.

Wheat futures shone bright against the other grains closing 3.47%, 4.10% and 6.96% higher on the CBOT, KCBT and MGEX for the week. Wheat finished mixed the last trading day of the week on less than expected export sales. Sales for 2010/11 and 2011/12 were a combined total of 597,011 MT. Global demand is good with several announcements during the week for tenders or sales. Private exporters announced the sale of 100,000 MT of HRW wheat to Iraq this morning. World wheat feeding is expected to top 2009/10 by nearly 7.4 MMT in 2010/11 and stock draw down is expected to exceed buildup with global crop problems already an issue for 2011/12.

Cattle futures were up 1.79% for the week, adding on to last weeks gains. The CME feeder cattle index is at its highest level in 4 years as the demand for cattle and lower supplies has pulled slaughter ahead, speeding up the cycle and thus creating more demand for feeder cattle. Feeder cattle were up another 2.04%. Choice boxed beef was $2.23 or 1.38% lower from Thursday to Thursday and Select was $.33 or .22% higher. Cash cattle in TX/OK and KS mostly sold for $104 yesterday. NE cattle sold for mostly $103 in the live and $161 to $164 in the dressed. Beef export demand has been strong with buyers shifting to the New Year. Export sales for 2010 were a negative 7,800 MT as an adjustment and export sales for 2011 were 10,400 MT, netting out to a small sum.

Here are the Thursday night closes for this holiday week and the Friday night closes for the previous three weeks, along with the net change for this week vs. the previous week:

 

Commodity

 

 

 

 

Weekly

Weekly

Month

12/03/10

12/10/10

12/17/10

12/23/10

Change

% Change

Mar

Corn

$5.74

$5.74

$5.97

$6.14

0.18

2.93%

Mar

CBOT Wheat

$7.79

$7.76

$7.57

$7.83

0.26

3.47%

Mar

KCBT Wheat

$8.12

$8.22

$8.12

$8.45

0.33

4.10%

Mar

MGEX Wheat

$8.22

$8.32

$8.12

$8.68

0.57

6.96%

Jan

Soybeans

$13.00

$12.73

$12.99

$13.50

0.51

3.91%

Jan

Soybean Meal

$350.10

$339.10

$347.80

$360.00

12.20

3.51%

Jan

Soybean Oil

$53.08

$53.79

$54.13

$56.59

2.46

4.54%

Dec

Live Cattle

$103.18

$100.95

$102.18

$104.00

1.83

1.79%

Jan

Feeder Cattle

$118.68

$118.18

$119.03

$121.45

2.43

2.04%

Feb

Lean Hogs

$76.58

$75.15

$75.95

$78.73

2.77

3.65%

Mar

Cotton

$132.34

$136.97

$150.12

$148.12

2.00

1.33%

Mar

Oats

$3.67

$3.85

$3.87

$3.94

0.07

1.81%

Jan

Rice

$14.67

$13.93

$13.70

$13.40

0.30

2.19%

Hogs had a 3.65% gain for the week. The pork carcass cutout value was up $.43 on Thursday. On a Thursday/Thursday basis, the carcass price was down 2.08%. The monthly cold storage report showed total pork in storage at 469,421,000 pounds as of November 30th, down 2.6 from a month ago and 2.8 percent from a year ago. Pork in storage as of the same date in 2009 was 482,816,000 pounds. Cash hogs were higher today with the ECB up $2.19.

Cotton futures were 1.33% lower for the week on exhaustion. Cotton closed limit down today on the front month with Dec ’11 actually making slight gains. Cotton has been limit up or down for most of the sessions lately making it a tricky market to participate in because there are limited opportunities to get in or out. Cotton actually went positive earlier in the day. Options trade was halted again today on account of double limit trade on a synthetic basis. India announced earlier in the week they are going to allow the estimated unshipped 2.5 million bales to be exported even though they were not in the original deadline. Export sales came in today at a healthy combined old and new crop sum of 405,400 RB.

Market Watch:  The quarterly Hog and Pig report will be out Monday at 2 P.M. Central time. Analysts average estimate for December 1 All Hogs is 99.4 per cent, Kept for Breeding is 99.2 percent and Kept for Marketing is 99.4%. The other usual reports will come out next week with some reports out Monday that were postponed like the CFTC disaggregated futures and options report as well as the meat production report.

LoThere is a risk of loss in futures and options trading.  Such trading is not appropriate for all individuals. Past performance is not necessarily indicative of future results.  Comments made in this article are in no way to be seen as an endorsement of futures and options trading. 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 our individualized subscription and consulting services.

 Copyright 2010 Brugler Marketing & Management, LLC

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