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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.

Prices Thaw Out

Dec 23, 2011

Brugler

Market Watch w/Alan Brugler

December 23, 2011

Prices Thaw Out

We might have had the first official day of winter this week, but for the grains and livestock it acted more like spring. The bull markets of 2011 had been in the deep freeze since August (earlier for wheat), but showed some signs of thawing this week.

 Corn futures were up 36 ½ cents for the week after losing 11 cents the prior week. Weekly export sales continue to improve, as do shipments of previously sold corn. China has been a regular feature on the sales with outstanding sales at 1.2595 MMT as of December 15th and accumulated exports at 1.5777 MMT for the current marketing year.  Potential for production losses in Argentina and Brazil continues, due to declining soil moisture and high temps during pollination. The CFTC report today showed the large spec funds mildly liquidating net longs as of Tuesday. Total open interest has declined as a ripple effect of the MF Global melt down.

The wheat complex rallied in tandem with the corn market, posting gains of 4.1 to 6.55% at the three exchanges. Weekly export sales continue to be less than stellar with sales totaling 362,255 MT for the week ending December 15th.  Argentine new crop is now available in the world market, along with Australian production that is expected to be record or near record large. On the other hand, KC protein basis firmed all week because of demand for milling quality hard wheat and limited farmer selling interest.

 

Commodity

 

 

 

 

Weekly

Weekly

Month

12/02/11

12/09/11

12/16/11

12/23/11

Change

% Change

Mar

Corn

5.9525

5.9425

5.83

6.195

0.3650

6.26%

Mar

CBOT Wheat

6.255

5.96

5.8375

6.22

0.3825

6.55%

Mar

KCBT Wheat

6.815

6.615

6.395

6.75

0.3550

5.55%

Mar

MGEX Wheat

8.445

8.2725

8.1125

8.445

0.3325

4.10%

Jan

Soybeans

11.3575

11.07

11.3

11.63

0.3300

2.92%

Jan

Soybean Meal

288.3

276.9

290.3

297

6.7000

2.31%

Jan

Soybean Oil

50.25

49.6

49.55

50.96

1.4100

2.85%

Dec

Live Cattle

121.9

118.3

118.15

124.3

6.1500

5.21%

Jan

Feeder Cattle

147.075

142.1

143.05

147.625

4.5750

3.20%

Feb

Lean Hogs

89.225

86.425

83.15

85.85

2.7000

3.25%

Mar

Cotton

91.84

90.43

86.07

87.24

1.1700

1.36%

Mar

Oats

3.15

3.02

3.0125

3.1125

0.1000

3.32%

Jan

Rice

14.455

14.01

13.685

13.905

0.2200

1.61%

 

Soybeans rallied 2.9% for the week, adding to the 2.08% gain from last week. Soybean meal was up 2.3% despite weakening a little on Thursday and Friday. Soy oil jumped 2.85%, with palm oil hitting a multi-week high. It looks like the blend credit for biodiesel will expire, but plants have been aggressively producing as much as they can ahead of time. That has made a serious dent in the US soy oil stockpile, which had been up around 3.3 billion pounds. Weekly export sales were still anemic at 728,404 with accumulated shipments at 12.99 MMT.  South American weather is on everyone’s radar, with dry spots continuing to develop. The large managed money traders in the CFTC report were adding net longs as of Tuesday, making their position net positive again.

Cotton was up 1.36% this week. Weekly export sales through Dec 15 were net positive at 84,875 RB for both marketing years. The problem is with global demand and the potential for further slowing as austerity measures are implemented in Europe and potentially nudge the Eurozone back into recession territory.

Lean Hog futures were up 3.25% for the week as they headed into the Hogs and Pigs report on Friday. The Hogs and Pigs report was initially seen as bullish due to a smaller breeding herd than expected, but does show expansion in hog numbers with farrowing intentions for Dec-Feb at 100.8% of year ago and the overall market hog snout count up 1.7% from last year. Pork carcass cutout values were down 3.82%.Weekly pork production was unchanged but down 3.4% YTD. Managed Money was offloading net longs in the CFTC report as of Tuesday.

 

Cattle futures surged 5.2% for the week. Cash cattle trade had another of those big up weeks, trading at $123-127 on Thursday. Weekly export sales were poor, but the total for the year has pushed the record at an unofficial accumulated total of 780,492 MT.  Wholesale prices were up 1.4% on a Friday/Friday basis. YTD beef production is now down 0.3%.

Market Watch: The markets will be closed on Monday the 26th. There is no scheduled Globex session for grains or livestock on Monday night, so the market will re-open on Tuesday. Next week should be very light volume with market participants on holiday vacation. That doesn’t mean we couldn’t see some fireworks! If markets are open and volume is light, watch out!

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 2011 Brugler Marketing & Management, LLC

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