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RSS By: Alan Brugler, AgWeb.com

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

Black Ink for Corn and Beans

Oct 15, 2010

 brulogomed

Market Watch and Nov Soybean Tech Talk
October 15, 2010
Black Ink for Corn and Beans
 
Soybeans were up 50 cents per bushel for the week, 4.41%.  Doing the math, they are up $1.28/bushel in the past two weeks. That’s a big move by anyone’s definition. USDA’s tighter ending stocks forecast of 265 million bushels for next August prompted a gap higher open, and November futures posted new highs for the calendar year on Monday, Wednesday and Friday. Weekly export sales for last week were within the range of trade estimates at 1.109 MMT. Brazilian soybean planting is underway, with Mato Grosso delayed a little while producers waiting on the end of the dry season. Parana has more planted because it has received favorable rains earlier.
 
Corn was up 6.6% for the week, tacking 35 cents onto the 63 cent gain from the previous week. Nearly all of that gain came on Monday as the market followed through on the bullish USDA ending stocks estimate of 902 million bushels issued the previous Friday. Harvest is progressing rapidly, with more that 51% of the crop in the bin or a pile as of last Monday. Weather has been excellent for rapid harvest progress over most of the Corn Belt this past week. USDA reported disappointing weekly export sales numbers on Friday, with the actual figure at only 1.18 MMT of combined 2010 and 2011 sales. Wire service reports showed analysts looking for 1.5 MMT or more.
 
Wheat futures were down at all three exchanges this past week, despite a small rally on Friday. Spread activity favored corn and soybeans against wheat for much of the week, looking for a traditional post harvest rally in corn and beans that would outstrip any wheat gains. A few of those positions were unwound on Friday, with legitimate questions about whether that spread would work normally given the contra-seasonal rally in the corn and beans coming into harvest. Wheat weekly export sales for the prior week were only 377,000 MT vs. trade expectations for 500,000 MT or more. A much more aggressive pace is needed to meet USDA’s forecast for the year.
 
Cotton futures posted new a new all time high price of 119.80 in electronic trading on Thursday night. An automatic trading halt kicked in on the options market on Thursday after prices were trading double limit up. The overnight market traded those levels, and then major profit taking kicked in. Prices were limit down on Friday. The net change for the week was +2.52%.  Chinese cotton prices continued to soar, with the government there issuing a warning about excessive speculation.
 

 
Commodity
 
 
 
 
Weekly
Weekly
Month
09/24/10
10/01/10
10/08/10
10/15/10
Change
% Change
Dec
Corn
$5.22
$4.66
$5.28
$5.63
0.35
6.58%
Dec
CBOT Wheat
$7.20
$6.55
$7.19
$7.05
0.15
2.05%
Dec
KCBT Wheat
$7.58
$6.90
$7.59
$7.45
0.14
1.78%
Dec
MGEX Wheat
$7.63
$7.06
$7.65
$7.54
0.11
1.37%
Nov
Soybeans
$11.26
$10.57
$11.35
$11.85
0.50
4.41%
Dec
Soybean Meal
$317.00
$289.90
$316.20
$328.20
12.00
3.80%
Dec
Soybean Oil
$44.89
$43.83
$46.62
$47.77
1.15
2.47%
Oct
Live Cattle
$96.02
$95.95
$95.55
$98.15
2.60
2.72%
Oct
Feeder Cattle
$109.50
$111.80
$107.72
$108.75
1.03
0.96%
Dec
Lean Hogs
$76.45
$72.88
$73.85
$68.90
4.95
6.70%
Dec
Cotton
$99.93
$98.02
$107.17
$109.87
2.70
2.52%
Dec
Oats
$3.52
$3.33
$3.69
$3.70
0.01
0.34%
Nov
Rice
$12.36
$12.37
$13.25
$13.59
0.34
2.57%

 
Cattle futures gained 2.7% for the week, with the bulk of the advance on Friday. Cash cattle trade was active on Thursday at $96-97.00, with a few trades at $97.50. Futures had been at $96 and had to rally to reflect the higher cash trade during the October contract delivery process. Estimated slaughter for the week (including Saturday) was projected at 659,000 head. That would be 30,000 head larger than the same week in 2009, but down 5,000 head from the previous week. This is consistent with Brugler Marketing work which shows ready numbers in October that are above year ago, but dropping as the month goes on. November numbers should drop below year ago levels based on in weights and excellent fall weather. Boxed beef prices were up 1.9%-2.1% for the week to reflect the reduced supply.
 
Hogs were the major loser for the week, down $4.95 or 6.7%. The pork carcass value slid 3% for the week, with the ham quote down almost 11% in 5 trading days. Pork bellies were also down.  The slide in product value put pressure on packer bids, with packers also suggesting that they were running close to capacity and didn’t need more hogs for the current week. The weaker US dollar may be helping export interest, but Census pork export data is still running two months behind.
 
Market Watch: The market goes back to a normal week this week, if such a thing is possible. USDA will give us the typical weekly crop progress and export inspections reports on Monday. Monthly Milk Production is on Tuesday afternoon. Weekly Export Sales are on Thursday morning. The major USDA reports for the week will be issued on Friday afternoon, with USDA’s Cold Storage and Cattle on Feed reports. Friday will also mark the expiration of the November grain options.  
 
Looking for professional help with your agricultural marketing decisions? Consider subscribing to our daily Ag Marketing Professional service or Special Research Reports. Call our office for details at 402-697-3623, or visit www.bruglermarketing.com.
 
There 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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