Apr 17, 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.

Railroad Blues

Apr 11, 2014

 Brugler

Market Watch with Alan Brugler

April 11, 2014

Railroad Blues

 

If there was a common theme to the grain markets this week, it was the Railroad Blues. Nearly all of the commodity organizations were testifying, lobbying or tweeting their displeasure over the inability of the US rail system to pick up needed cars on time and return the empties on time. The delays have had a serious economic impact on cash grain prices, fertilizer, ethanol, DDGS, coal, etc through basis adjustments or outright spot shortages and surpluses. River and lake openings should help a little, but it looks like it will be months before things return to anything resembling normal.

Corn futures rallied into the USDA reports on Wednesday morning, but closed 3 cents lower for the week despite nominally bullish numbers in the reports themselves. USDA hiked projected US exports by 125 million bushels, and trimmed ending stocks to 1.331 billion bushels. That took the stocks/use ratio below 10% and increased the cash average price estimate to $4.60 for the marketing year. The bearish news later in the week included a slowdown in corn export sales to 716,700 MT from 998,500 MT the week before. Daily average ethanol production slowed while ethanol stocks increased, a bearish combination. The pace of imports also increased from 11,000 bpd to 38,000 bpd as US prices exceeded the breakeven for imports from Brazil into the East and West Coast markets. Rail snafus continue to hinder US ethanol movement, as they are also doing with coal and grain. The CFTC Commitment of Traders report on Friday afternoon showed a reduction in the spec fund net long position. They reduced their exposure ahead of the April 9 reports. The Managed Money reporting category cashed out 5,699 long positions this week, reducing the net long to 270,137 contracts as of April 8.

Soybean futures were down 11 cents per bushel for the week, a 0.73% drop. Meal was down 1.29%, while soy oil rallied 1.27%. Old crop beans hit a high of $15.12 on Wednesday but sold off hard into the weekend. USDA tightened projected old crop ending stocks to 135 million bushels, both raising exports and imports. The weekly US soybean export sales announced on Thursday slowed to a paltry 79,100 MT of old crop, with new crop jumping to 210,400 MT.  Total US export Commitments for 2013/14 are now at 100% of the USDA forecast for the year. USDA announced another 330,000 MT of new crop sales to "unknown destinations" on Friday morning. As of the close on this past Tuesday, CFTC shows managed money accounts were exiting longs ahead of the USDA report. Their net long shrank12, 194 contracts bringing their overall net long position to 181,252 contracts.

 

 

Commodity

 

 

 

 

Weekly

Weekly

Month

03/21/14

03/28/14

04/04/14

04/11/14

Change

% Change

May

Corn

$4.79

$4.92

$5.02

$4.99

($0.03)

-0.65%

May

CBOT Wheat

$6.93

$6.96

$6.70

$6.60

($0.09)

-1.42%

May

KCBT Wheat

$7.71

$7.64

$7.34

$7.20

($0.14)

-1.94%

May

MGEX Wheat

$7.43

$7.40

$7.22

$7.02

($0.20)

-2.74%

May

Soybeans

$14.09

$14.37

$14.74

$14.63

($0.11)

-0.73%

May

Soybean Meal

$455.90

$468.40

$479.10

$472.90

($6.20)

-1.29%

May

Soybean Oil

$41.02

$40.48

$41.57

$42.10

$0.53

1.27%

April

Live Cattle

$144.00

$146.50

$143.05

$144.85

$1.80

1.26%

Apr

Feeder Cattle

$175.28

$178.35

$177.70

$179.50

$1.80

1.01%

April

Lean Hogs

$125.68

$125.58

$123.15

$124.93

$1.77

1.44%

May

Cotton

$93.31

$93.74

$92.40

$89.02

($3.38)

-3.66%

May

Oats

$4.15

$4.02

$4.11

$4.04

($0.07)

-1.77%

May

Rice

$15.43

$15.51

$15.76

$15.66

($0.10)

-0.67%

Wheat futures were down 1.4 to 2.7% for the week, with Minneapolis down the hardest. Weekly wheat export sales reported this week were 390,900 MT, down from 646,900 MT the previous week. Old crop sales were only 41,800 MT. That encouraged the already aggressive bears. USDA wheat ending stocks were hiked to 583 million bushels. No change was made to exports, but feed use was reduced 30 mbu based on the March 1 stocks data and projected imports were trimmed back 5 million. The EU approved another 585,000 MT of wheat for export, taking the total for the year to roughly to 23.9 MMT. As of the close on April 8, managed money accounts were starting to cash out their new net long in CBT wheat, exiting 1,836 contracts for the week and bringing the long to 43,189 contracts. The big spec funds exited 4,731 longs in KC this week, cutting the net long to 40,978 contracts in KC wheat.

Cotton futures were down 3.6% this week after dropping 1.4% the prior week. USDA put weekly export sales for cotton last week at 109,600 RB, but old crop sales were net negative. Total commitments as % of total exports are now at 92% compared to 93% last year and the 5 year average of 97%. The weekly Commitment of Traders report showed managed money accounts paring back their net long position by 3,635 contracts. That left the net position at 59,670 long.

Cattle futures were up 1.26% this week. Cash cattle trade was spotty, with packers relying on captive cattle. Some traded at $148 in the south, with most asking prices on Friday at $150. April futures were being supported by their discount to the cash market. Weekly slaughter at 573,000 was down from 583,000 the prior week and 607,000 a year ago. Wholesale prices continued to retreat from the March 18 high. Choice boxes were down 2.9% this week, while Select dropped 2.3%. Weekly estimated slaughter at 583,000 head was down 2,000 from last week and 14,000 below year ago. Beef production YTD is down 5.9% from last year. USDA weekly beef export sales totaled 13,800 MT, up slightly from 13,300 MT the prior week and showing little price rationing damage.  

 

April Lean Hog futures were up 1.44% this week. April futures were supported by their discount to the CME Lean Hog Index, and the need to converge with that Index on April 14. Estimated weekly slaughter was 2.02 million head, down 10,000 head from the previous week. That was down 3.9% from the same week in 2013 and thus supportive to nearby pork prices. Carcass weights were up 6# from last year, which meant pork production for the week was down only 0.4% despite the light run. The pork carcass cutout lost 4.76% this week, with hams extremely week as processor demand dried up. USDA weekly export sales for pork were the poorest of the year at 4,200 MT. The CFTC Commitment of Traders report shows spec long liquidation of 3,267 contracts for the week, leaving the managed money crowd net long 70.655 contracts.

 

Market Watch

 

The cotton market will start the week adapting to any surprise futures positions inherited upon options expiration on the weekend.  USDA will issue the usual Export Inspections report on Monday morning, and hopefully a weekly Crop Progress report on Monday evening (last week was delayed until Tuesday). NOPA crush is scheduled for release on Tuesday or Wednesday. USDA weekly export sales are due out on Thursday morning. Equity options expire on the 17th, as do April feeder cattle. The US markets are closed on Friday for the Good Friday holiday and Easter weekend.

 

Visit our Brugler web site at http://www.bruglermarketing.com, find our iPad app "AgMarket" in the app store, or call 402-697-3623 for more information on our consulting and advisory services for farm family enterprises and agribusinesses.

 

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.                  

Copyright 2014 Brugler Marketing & Management, LLC

A Whole New Ball Game

Apr 04, 2014

 Brugler

Market Watch with Alan Brugler

April 4, 2014

It’s a Whole New Ballgame

 

Major League baseball started its 2014 season this week, trying to jazz things up with some unusual venues but still with a long season ahead. While the NCAA basketball tournament is still wrapping up, and the NBA will drag on into June, the seasonal switch in attention is underway. The grain and livestock markets are also showing that is a whole new ball game, with hogs and wheat selling off sharply since the calendar turned to April. The other grains and oilseeds are still trying to determine whether they’ve given adequate attention to the Grain Stocks and Planted Acreage numbers released at the end of the old ballgame, on March 31. 

Corn futures closed 2% higher this week, the highest front month weekly close since September. Weekly corn export sales slowed to 998,500 MT, but were still seen as positive because export commitments have now reached 100% of the US forecast for the entire year.  Daily average ethanol production rose to 922,000 bpd last week, and ethanol stocks rose by 200,000 barrels amidst very high cash ethanol prices. Imports did start to arrive, with 11,000 bpd coming into the East Coast for the first time in 26 weeks. US ethanol prices had rallied enough to make imports competitive, and rail snafus continue to hinder US ethanol movement. The CFTC Commitment of Traders report on Friday afternoon confirmed that spec fund buying continues. The Managed Money reporting category added another 36,549 contracts to their net long, which reached 275,836 contracts as of April 1.

Soybean futures were up 2.6% this week, aided by a 2.3% advance in soybean meal and a 2.7% jump in soy oil. The $1 blend credit for soy oil use in biodiesel was included in Senate discussion of a tax extenders bill, but the bill is given slim chance of passing the House in its current form. Old crop beans got a boost because March 1 stocks stayed below 1 billion bushels, and were the tightest in 10 years. New crop saw record projected acreage at 81.5 million, but November futures rallied along with the old crop. Weekly US soybean export sales slowed to a paltry 85,500 MT, with only 19,300 MT of new crop booked. Total US export Commitments for 2013/14 are now at 107% of the USDA forecast for the year. As of the close on this past Tuesday, CFTC shows managed money accounts adding a few longs vs. the previous week. Their net long grew 8,071 contracts bringing their overall net long position to 193,446 contracts.

 

 

4/4/2014

           

 

Commodity

 

 

 

 

Weekly

Weekly

Month

03/14/14

03/21/14

03/28/14

04/04/14

Change

% Change

May

Corn

$4.86

$4.79

$4.92

$5.02

$0.10

1.98%

May

CBOT Wheat

$6.87

$6.93

$6.96

$6.70

($0.26)

-3.70%

May

KCBT Wheat

$7.52

$7.71

$7.64

$7.34

($0.30)

-3.93%

May

MGEX Wheat

$7.34

$7.43

$7.40

$7.22

($0.19)

-2.50%

May

Soybeans

$13.89

$14.09

$14.37

$14.74

$0.37

2.59%

May

Soybean Meal

$444.00

$455.90

$468.40

$479.10

$10.70

2.28%

May

Soybean Oil

$42.29

$41.02

$40.48

$41.57

$1.09

2.69%

April

Live Cattle

$145.25

$144.00

$146.50

$143.05

($3.45)

-2.35%

Apr

Feeder Cattle

$177.25

$175.28

$178.35

$177.70

($0.65)

-0.36%

April

Lean Hogs

$119.30

$125.68

$125.58

$123.15

($2.43)

-1.93%

May

Cotton

$92.19

$93.31

$93.74

$92.40

($1.34)

-1.43%

May

Oats

$4.44

$4.15

$4.02

$4.11

$0.09

2.18%

May

Rice

$15.36

$15.43

$15.51

$15.76

$0.25

1.61%

 

Wheat futures were sharply lower. Chicago was down 3.7%, KC slipped 3.9% and the MPLS May contract was off 2.5%. Weekly wheat export sales reported this week were 646,900 MT, down from 728,000 MT the previous week. That encouraged the already aggressive bears. USDA wheat stocks were about as expected, at 1.06 billion bushels. Planting intentions were a little smaller than expected at 55.8 million, but some spotty rains helped improve HRW prospects and settled some of the dust storms that had been making the news. The EU approved another 506,000 MT of wheat for export, taking the total to 23.3 MMT. As of the close on March 25, managed money accounts were still expanding their new net long in CBT wheat to 45,025 contracts. The big spec funds were already net long and expanded that position to 45,709 contracts in KC wheat.

Cotton futures were down 1.4% this week. USDA put weekly export sales for cotton last week at 120,000 RB, o f which 114,200 RB was upland and 5,500 RB was pima.   Total commitments as % of total exports are now at 92% compared to 91% last year and the 5 year average of 96%. The weekly Commitment of Traders report showed managed money accounts paring back their net long position by 4,711 contracts, a few more than they added the week before. That left the net position at 63,305 long.

Cattle futures were down 2.4% this week. Cash cattle traded at $148 in the south, down $2 from the previous week. The CME is still at a big discount to that level of cash prices, with first notice day for April futures on Monday. We would expect zero deliveries. Wholesale prices continued to retreat from the March 18 high. Choice boxes were down 2.4% this week, while Select dropped 4.4%. Weekly estimated slaughter at 583,000 head was down 2,000 from last week and 14,000 below year ago. Beef production YTD is down 5.9% from last year. USDA weekly beef export sales totaled 13,800 MT, up slightly from 13,300 MT the prior week and showing little price rationing damage.  

 

April Lean Hog futures lost 1.9% this week following the bearish Hogs & Pigs report. April futures were supported by their discount to the CME Lean Hog Index, and the need to converge with that Index on April 14. Summer futures were down $8.80 in the June contract for the week, as the H&P report showed more hogs would be available this summer than the market had been trading. Estimated weekly slaughter was 2.03 million head, down 3,000 head from the previous week. That was down 3.2% from the same week in 2013 and thus supportive to nearby pork prices. Carcass weights were up 6# from last year, which meant pork production for the week was down only 0.4% despite the light run. The pork carcass cutout lost 0.25% this week, with half of the primal rising and half of them declining. USDA weekly export sales for pork were stronger than expected at 13,800 MT vs. 6,600 MT the previous week.

 

Market Watch

 

Cattle traders will begin the week reacting to any surprise positions from the April cattle options expiration on Friday. Grain traders will get the usual USDA Export Inspections report on Monday morning at 10 am CDT and weekly USDA Export Sales report on Thursday morning. USDA will issued Crop Production and Supply/Demand reports on Wednesday morning, with some "known" changes stemming from the March 31 Grain Stocks reports.

 

Visit our Brugler web site at http://www.bruglermarketing.com, find our iPad app "AgMarket" in the app store, or call 402-697-3623 for more information on our consulting and advisory services for farm family enterprises and agribusinesses.

 

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.                  

Copyright 2014 Brugler Marketing & Management, LLC

March Madness Persists

Mar 28, 2014

 Brugler

Market Watch with Alan Brugler

March 28, 2014

March Madness Persists

 

The ag commodity markets are having their own flavor of March Madness, with big price swings driven by meat scarcity, drought issues/sudden showers affecting winter wheat, and skittishness ahead of the March 31 USDA reports (which have often yielded big price moves). For the NCAA, the weekend resolves the Sweet Sixteen and gets us to the Final Four. For the grain and livestock markets, the 4 day period (Friday Hogs report to Monday Grain Stocks and Intentions) will have the same affect. We’ll know who the hot bullish teams are for the month of April, and who has had a "nice run and done".

Corn futures posted the highest front month close since September this week, and were up 2.71% for the week. Strong weekly corn export sales were the main driver for the old crop rally, with USDA showing 1.437 MMT of total sales for the week.  Daily average ethanol production slowed to 885,000 bpd last week, and ethanol stocks rose by 400,000 barrels amidst very high cash ethanol prices. Imports have been zero for 25 weeks in a row. East Coast firms claim to be losing 10 cents per gallon on every gallon of E10 they sell. The CFTC Commitment of Traders report on Friday afternoon confirmed that spec fund buying continues. The Managed Money reporting category added another 11,427 contracts to their net long, which reached 239,287 contracts as of March 18.

Soybean futures were up 1.97% this week, aided by a 2.74% advance in soybean meal. Soy oil lost 1.32% on top of a 3% slide the prior week. Weekly US soybean export sales slowed to 546,800 MT, with only 11,900 MT of old crop booked. There shouldn’t be any additional old crop booked, because the US doesn’t have the beans. Total US export Commitments for 2013/14 are now at 107% of the USDA forecast for the year. The trade average guess for March 1 soybean stocks is around 989 million bushels, with planted acreage expectations at 81.5-82 million. As of the close on this past Tuesday, CFTC shows managed money accounts backing off of their net long position for soybeans from the previous week by 13,243 contracts bringing their overall net long position to 185,429 contracts.

 

 

Commodity

 

 

 

 

Weekly

Weekly

Month

03/07/14

03/14/14

03/21/14

03/28/14

Change

% Change

May

Corn

$4.89

$4.86

$4.79

$4.92

$0.13

2.71%

May

CBOT Wheat

$6.54

$6.87

$6.93

$6.96

$0.02

0.32%

May

KCBT Wheat

$7.21

$7.52

$7.71

$7.64

($0.08)

-0.97%

May

MGEX Wheat

$7.05

$7.34

$7.43

$7.40

($0.03)

-0.44%

May

Soybeans

$14.58

$13.89

$14.09

$14.37

$0.28

1.97%

May

Soybean Meal

$457.80

$444.00

$455.90

$468.40

$12.50

2.74%

May

Soybean Oil

$44.32

$42.29

$41.02

$40.48

($0.54)

-1.32%

April

Live Cattle

$143.25

$145.25

$144.00

$146.50

$2.50

1.74%

Apr

Feeder Cattle

$173.65

$177.25

$175.28

$178.35

$3.07

1.75%

April

Lean Hogs

$113.00

$119.30

$125.68

$125.58

($0.10)

-0.08%

May

Cotton

$91.27

$92.19

$93.31

$93.74

$0.43

0.46%

May

Oats

$4.46

$4.44

$4.15

$4.02

($0.13)

-3.13%

May

Rice

$15.31

$15.36

$15.43

$15.51

$0.08

0.55%

 

Wheat futures were mixed this week. Chicago was up 0.32%, KC slipped 0.97% and the MPLS May contract was off 1.3%. Weekly wheat export sales reported this week were 728,000 MT, up from 597,000 MT the previous week. That got the bulls running, even though export commitments are 94% of the USDA forecast for the year and would typically be 97% by now.  The EU approved another 810,000 MT of wheat for export, taking total commitments for the year over 24 MMT. They are allowing more corn imports and exporting wheat that would have been fed. As of the close on March 25, managed money accounts were still expanding their new net long in CBT wheat to 36,492 contracts. The big spec funds were already net long and expanded that position to 42,952 contracts in KC wheat.

Cotton futures rose another .46% this week after a 1.2% gain last week.  US Export commitments improved to 92% of the USDA forecast for the year. This occurred despite fairly slow weekly export sales of 157,600 RB of upland and pima cotton.  The weekly Commitment of Traders report showed managed money accounts building up their net long position by 4,607 contracts to take their overall net long position to 67,576 contracts.

Cattle futures were up 1.74% this week. Futures were supported by a strong cash cattle trade at $152+ and $244+ in the north. The CME is still at a big discount to that level of cash prices, with April options expiring a week from now. Wholesale prices turned weaker at midweek.  On a Friday/Friday basis, Choice boxes lost 2.4%, and Select boxes were 2.7% lower. Weekly estimated slaughter at 585,000 head was up 1.74% from the prior week but 2.17% smaller than the same week last year. USDA weekly beef export sales totaled 13,300 MT, down from 16,300 MT the prior week.

 

April Lean Hog futures lost 10 cents this week after more than three weeks in a row with gains of 5% or more.  Estimated weekly slaughter was 2.033 million head, down 9000 head from the previous week. That was down 7% from the same week in 2013 and thus supportive to pork prices. The pork carcass cutout lost 0.14% this week. USDA weekly export sales for pork were still slow at 6,600 MT. High prices do tend to slow exports and that is the goal of this entire hog rally. The Friday afternoon USDA Hogs & Pigs report showed March 1 All Hogs at  96.6% of last year. The breeding herd was 100.3% and the market hogs were 96.3%.  Of key concern, the <50# weight bracket was 96.02% below year ago and the  50-120# group was 96.71%.  The market had priced in more bullish numbers than it received in the report!

 

 Market Watch

 

Livestock traders will begin the week reacting to the USDA Hogs and Pigs report from Friday night. Grain traders will get the usual USDA Export Inspections report on Monday morning at 10 am CDT, but the focus will be clearly on the Grain Stocks and Planting Intentions reports to be released at 11 am. USDA will issue the usual weekly Export Sales report on Thursday morning. April cattle options will expire on Friday, April 4.

 

 http://www.bruglermarketing.com, find our iPad app "AgMarket" in the app store, or call 402-697-3623 for more information on our consulting and advisory services for farm family enterprises and agribusinesses.

 

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.                  

 

Copyright 2014 Brugler Marketing & Management, LLC

More March Madness

Mar 21, 2014

 Brugler

Market Watch with Alan Brugler

March 21, 2014

Much March Madness

As followers of the NCAA Men’s Basketball Tournament can attest, the term March Madness is well deserved, as expected winners are upset with some regularity. Big names like Ohio State, Duke and Iowa were all one and done. The ag commodity markets are having their own flavor of March Madness, with big price swings driven by meat scarcity, drought issues with winter wheat, and skittishness ahead of the March 31 USDA reports (which have often yielded big price moves).

Corn futures lost 7 cents per bushel for the week in the May contract. Daily average ethanol production jumped to 891,000 bpd last week, and ethanol stocks tightened to only 15.3 million barrels. Imports have been zero for 24 weeks in a row. Weekly corn export sales were close to expectations as USDA put the actual figure at 745,800 MT. USDA shows that 94% of the projected corn sales for the year are already on the books. We would typically only be 75% by now. The CFTC Commitment of Traders report on Friday afternoon confirmed that spec fund buying continues. The Managed Money reporting category added another 18,299 contracts to their net long, which reached 227,860 contracts as of March 11.

Soybean futures were up 1.5% this week, aided by a 2.7% advance in soybean meal. Soy oil lost 3% on top of a 4.6% slide the prior week. Weekly US soybean export sales were 639,700 MT (including 437,500 MT for 14/15). Total US export Commitments for 2013/14 are now at 107% of the USDA forecast for the year. Projected US ending stocks were tightened to 145 million bushels but USDA still needs to find a way to show more exports.  As of the close on this past Tuesday, CFTC shows managed money accounts adding to their net long position for soybeans from the previous week by 6,024contracts bringing their overall net long position to 198,672 contracts.

Wheat futures were higher in all three classes. Chicago was up 0.9%, KC gained 2.6% and the MPLS May contract was up 1.3%. Weekly wheat export sales reported this week were 597,000 MT, up from 566,100 MT the previous week. Export commitments are 93% of the USDA forecast for the year, vs. the 5 year average of 95%. As of the close on March 18, managed money accounts were still expanding their new net long in CBT wheat to 24,036 contracts. The big spec funds were already net long and expanded that position to 37.051 contracts in KC.

Cotton futures rose another 1.21% this week after a 1% gain last week.  US Export commitments improved to 91% of the USDA forecast for the year. This compares to the 5 year average of 93%. This occurred despite fairly slow weekly sales of 50,800 RB of upland for old crop and 135,900 RB for new crop upland. The weekly Commitment of Traders report showed managed money accounts building up their net long position by 4,607 contracts to take their overall net long position to 67,576 contracts.

 

Commodity

 

 

 

 

Weekly

Weekly

Month

02/28/14

03/07/14

03/14/14

03/21/14

Change

% Change

May

Corn

$4.63

$4.89

$4.86

$4.79

($0.07)

-1.44%

May

CBOT Wheat

$6.02

$6.54

$6.87

$6.93

$0.06

0.87%

May

KCBT Wheat

$6.74

$7.21

$7.52

$7.71

$0.20

2.63%

May

MGEX Wheat

$6.56

$7.05

$7.34

$7.43

$0.09

1.26%

May

Soybeans

$14.14

$14.58

$13.89

$14.09

$0.20

1.46%

May

Soybean Meal

$457.70

$457.80

$444.00

$455.90

$11.90

2.68%

May

Soybean Oil

$41.79

$44.32

$42.29

$41.02

($1.27)

-3.00%

April

Live Cattle

$144.97

$143.25

$145.25

$144.00

($1.25)

-0.86%

Mar

Feeder Cattle

$171.70

$172.38

$174.70

$175.03

$0.33

0.19%

April

Lean Hogs

$106.85

$113.00

$119.30

$125.68

$6.38

5.34%

May

Cotton

$87.14

$91.27

$92.19

$93.31

$1.12

1.21%

May

Oats

$4.63

$4.46

$4.44

$4.15

($0.29)

-6.45%

May

Rice

$15.64

$15.31

$15.36

$15.43

$0.07

0.46%

 

Cattle futures were down 0.86% last week, mostly due to a sell off on Thursday. Cash cattle trade was $150-152, steady to $2 higher than the previous week and well above the April futures value. Wholesale prices were weaker.  Choice boxes lost 0.1%, and Select boxes were 1.2% lower on a Fri/Fri basis. Weekly estimated slaughter at 575,000 head was up 2% from the prior week but 4.8% smaller than last year. Estimated carcass weight was 6# higher than last year. Beef production YTD is down 6.8% from 2013. USDA weekly beef export sales totaled 16,300 MT, down only slightly from the 17,700 MT the previous week. The Cold Storage report on Friday night showed beef stocks on Feb 28 were 5% smaller than in January and 17% smaller than year ago. The Cattle on Feed report showed February placements 114.7% of year ago, with marketings the lightest since 1996 at 96.6%. That left On Feed at 99.5% of year ago.

Hog futures were up 5.34% this week after blistering gains of 5.6% and 5.8% the previous two weeks. That is a cumulative 17.6% rise in 3 weeks. Estimated weekly slaughter was 2.042 million head, up 0.9% from the previous week. That was still down 6.3% from the same week in 2013 and thus supportive to pork prices. Pork production was down 3.5% vs. the same week in 2013, with an extra 6# per carcass offsetting some of the loss in numbers. The pork carcass cutout gained 5.4% this week to add to the 11.5% from the prior week. USDA weekly export sales for pork were down 54% from the 4 week average, at only 5,200 MT. High prices do tend to slow exports and that is the goal of this entire hog rally. More than 20% of the US pork production is typically exported, and with a production shortfall expected more of it needs to stay home.  The Cold Storage report on Friday afternoon showed pork stocks up 6% from January, and 3% larger than year ago.

 Market Watch

Livestock traders will begin the week reacting to the USDA Cattle on Feed and Cold Storage reports released after the close on Friday afternoon. Grain traders will react to any surprise futures positions inherited via the expiration of the April grain options. USDA will release the usual Export Inspections report on Monday morning, with Export Sales on Thursday morning.

March feeder cattle futures will expire on the 27th. We’ll also be into month position asset allocation selling and buying by the hedge funds. USDA will give us a key piece of the Hogs puzzle on Friday night with the quarterly Hogs & Pigs report. Then we will be all lined up for the mega USDA reports on the following Monday, March 31 (Grain Stocks and Planting Intentions).

Visit our Brugler web site at http://www.bruglermarketing.com, find our iPad app "AgMarket" in the app store, or call 402-697-3623 for more information on our consulting and advisory services for farm family enterprises and agribusinesses.

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.                  

Copyright 2014 Brugler Marketing & Management, LLC

Flashing Plenty of Green

Mar 14, 2014

 Brugler

Market Watch with Alan Brugler

March 14, 2014

Flashing Plenty of Green 

With St. Patrick’s Day coming up on Monday, it seems appropriate that some of the commodity markets have been putting a lot of green in producer pockets. Hogs are the most obvious example, up 5.58% this week. In that case, it depends on whether your operation suffered PED losses. If you have the hogs, you are making serious money. Ditto for cattle. Wheat also posted strong gains even though a goodly portion of the winter wheat crop has yet to in fact leave dormancy and turn green.

Corn futures lost 3 cents per bushel for the week in the May contract. Daily average ethanol production slowed to 869,000 bpd last week due to rail logistics issues, but ethanol stocks tightened to only 15.9 million barrels. Weekly gasoline use was the largest of the calendar year, and imports have been zero for 23 weeks in a row. Plant margins continue to be excellent. Weekly corn export sales were slow as USDA put the actual figure at 787,000 MT (including 103,800 MT for 14/15). USDA shows that 93% of the projected corn sales for the year are already on the books. We would typically only be 72% by now. USDA raised projected exports for the year by 25 million bushels on Monday to reflect the blistering pace of sales activity. The CFTC Commitment of Traders report on Friday afternoon confirmed that spec fund buying continues. The Managed Money reporting category added another 51,439 contracts to their net long, which reached 209,561 contracts as of March 11.

Soybean futures were down 4.75% this week. Soybean meal was down 3%, but soy oil lost 4.6% after a bounce of 6.2% the prior week. With both products under pressure, the beans about had to go down. Weekly US soybean export sales were 890,400 MT (including 776,900 MT for 14/15). Total US export Commitments for 2013/14 are now at 106% of the USDA forecast for the year after USDA hiked projected exports by 20 million bushels on Monday. Projected US ending stocks were tightened to 145 million bushels.  As of the close on this past Tuesday, CFTC shows managed money accounts reduced their net long position for soybeans from the previous week by 15,845contracts bringing their overall net long position to 192,648 contracts.

Wheat futures were up sharply in all three classes. Chicago was up 5.1%, KC gained 4.2% and the MPLS May contract was up 4.1%. Weekly wheat export sales reported this week were 566,100 MT. vs. 600,500 MT the previous week. Export commitments are 91% of the USDA forecast for the year, vs. the 5 year average of 94%. As of the close on March 11, managed money accounts had flipped to net long (+10,515 contracts) in CBT wheat for the first time since October 29. The big spec funds were already net long and expanded that position to 32,944 contracts in KC.

 

Commodity

 

 

 

 

Weekly

Weekly

Month

02/21/14

02/28/14

03/07/14

03/14/04

Change

% Change

May

Corn

$4.59

$4.63

$4.89

$4.86

($0.03)

-0.61%

May

CBOT Wheat

$6.06

$6.02

$6.54

$6.87

$0.33

5.08%

May

KCBT Wheat

$6.76

$6.74

$7.21

$7.52

$0.30

4.19%

May

MGEX Wheat

$6.50

$6.56

$7.05

$7.34

$0.29

4.11%

May

Soybeans

$13.60

$14.14

$14.58

$13.89

($0.69)

-4.75%

May

Soybean Meal

$440.20

$457.70

$457.80

$444.00

($13.80)

-3.01%

May

Soybean Oil

$41.23

$41.79

$44.32

$42.29

($2.03)

-4.58%

April

Live Cattle

$141.50

$144.97

$143.25

$145.25

$2.00

1.40%

Mar

Feeder Cattle

$170.70

$171.70

$172.38

$174.70

$2.32

1.35%

April

Lean Hogs

$99.35

$106.85

$113.00

$119.30

$6.30

5.58%

May

Cotton

$88.35

$87.14

$91.27

$92.19

$0.92

1.01%

May

Oats

$4.32

$4.63

$4.46

$4.44

($0.03)

-0.59%

May

Rice

$15.34

$15.64

$15.31

$15.36

$0.04

0.29%

Cotton futures rose another 1% this week.  US Export commitments improved to 75% of the USDA forecast for the year. This compares to the 5 year average which is also 75%. This occurred despite fairly slow weekly sales of 60,000 RB of upland for old crop and 120,400 RB for new crop upland. Export shipments slowed to 264,200 running bales. The weekly Commitment of Traders report showed managed money accounts building up their net long position by 8,362 contracts to take their overall net long position to 62,969 contracts.

Cattle futures were up 1.4% last week. Cash cattle trade was $148-150, with most of it at $150 on Friday. Wholesale prices were strong until midweek.  Choice boxes gained 1.9%, and Select boxes were 1.6% higher on a Fri/Fri basis. Weekly estimated slaughter at 564,000 head was up 2.9% from the prior week but 7.2% smaller than last year. Estimated carcass weight was 7# higher than last year. Beef production YTD is down 7% from 2013. USDA weekly beef export sales totaled 17,700 MT, showing little effect of the higher wholesale prices on overseas buyers. The CFTC Commitment of Traders report showed managed money spec accounts reducing their net long position in live cattle by 779 contracts, bringing their overall net long position to 131,294 contracts. 

Hog futures were up 5.6% this week after a 5.8% advance the previous week. Estimated weekly slaughter was only 2.024 million head, down 2.1% from the previous week. That was also down 7.7% from the same week in 2013 and thus supportive to pork prices. Pork production was down 5.4%, with an extra 5# per carcass offsetting some of the loss in numbers. The pork carcass cutout gained 11.5% from Friday to Friday.  USDA weekly export sales for pork were down 25% from the previous week at only 7,100 MT and down 44% from the 4 week average. High prices do tend to slow exports and that is the goal of this entire hog rally, to keep more of the pork at home. More than 20% of the US pork production is typically exported. The managed money accounts (per CFTC) increased their net long position by another 2,709 contracts bringing their total net long position to 72,351 futures and options contracts.

  Market Watch

 We’ll start the week with St. Patrick’s Day, traditionally a big celebration for both New York and Chicago traders. NOPA is also expected to issue their monthly crush report. We will also get the usual weekly Export Inspections report on Monday, and weekly Export Sales on Thursday. Spring officially starts on Thursday! On Friday, USDA will release the monthly Cattle on Feed and Cold Storage reports at 2 pm CDT.  Friday also marks the expiration of April grain options and is the last trading day for most of the March financial options. Not to be overlooked, the FOMC will meet on Tuesday and Wednesday, and is expected to continue to reduce their bond buying program.

 Visit our Brugler web site at http://www.bruglermarketing.com, find our iPad app "AgMarket" in the app store, or call 402-697-3623 for more information on our consulting and advisory services for farm family enterprises and agribusinesses.

 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.                  

Copyright 2014 Brugler Marketing & Management, LLC

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