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May 2010 Archive for Market Watch

RSS By: Alan Brugler, AgWeb.com

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

Memorial Day Meltdown

May 28, 2010

Market Watch with Alan Brugler
May 28, 2010
 
Memorial Day Meltdown
 
Corn was tooling along fine until Friday. The US dollar ran into overhead technical resistance and dropped on Thursday, favoring commodities priced in dollars. However, the euro dropped and the dollar rallied ahead of the weekend, and corn got caught in the downdraft. Coupled with month end fund liquidation and the thin trading population ahead of the 3 day weekend, prices dropped hard on Friday. Warmer and drier WCB weather conditions were seen as bearish, although cool and wet conditions continue to plague the ECB and crops there are yellow in some cases. The EIA showed record ethanol production in March (most recent official data) and by extension record corn consumption for ethanol use.
 
Wheat futures were down at all three exchanges, with Chicago the weakest by being 3.02% lower. Winter wheat crop condition ratings dropped 1 point on the Brugler500 index. They are still the highest for this date since 1999. The US average winter wheat yield in 1999 was 47.8 bushels per acre vs. 44.2 last year. The U.S. continues to lose out on Egyptian buying tenders, with the Egyptians buying 180,000 MT of Russian wheat.
 
Soybeans were down 3 cents for the week. As with corn they would have been up on the week if not for the sell off on Friday. Soybean meal was supported by the Census crush report on Thursday morning, which showed meal stocks dropping below 300 thousand tons as of April 30. However, the selling pressure in livestock and corn took meal $2.10 lower for the week on demand concerns. Soy oil was up on the week, as the House finally passed the jobs bill that includes the retroactive one year extension of the biodiesel tax credit. That promises to eventually result in some incremental increase in soy oil use. However, the Senate adjourned for the holiday before considering the bill and won’t be back in session until June 7.
  
Cotton continues to be volatile. This week, it lost 3.52%, with only rice a “bigger loser” for the week. Weekly export sales were neutral, but there was significant liquidation of long positions in the July contract ahead of month end. Cert stocks deliverable against July futures are still in excess of a million bales, and represent almost 1/3 of projected US ending stocks for July 31. Bulls had hoped to see those stocks being pulled out for mill or export demand. However, as long as they are in the warehouse they are a threat to a speculative long who doesn’t want to own physical cotton in Memphis or Galveston or another delivery location.
 
Hog futures were a bullish exception to the wave of selling coming through the ag commodities. They eked out a 40 cent gain for the week. That’s mostly because June futures were at a big discount to the CME Lean Hog Index, and they are going to expire in a couple of weeks. Prices need to converge with the cash index at expiration, so you saw situations where futures were higher while cash was lower, narrowing the gap. The wholesale market stabilized, losing only 0.8% for the week despite the strength in the U.S. dollar and the lull in wholesale demand around the holiday. Pork bellies were up 4.2% for the week.
 
Below is a table showing the net weekly changes and 4 week history of selected agricultural futures:
 
 
Market Watch
 
 
 
 
Weekly
Weekly
Month
05/07/10
05/14/10
05/21/10
05/28/10
Change
% Change
July
Corn
$3.72
$3.63
$3.69
$3.59
0.10
2.71%
July
CBOT Wheat
$5.11
$4.72
$4.72
$4.58
0.14
3.02%
July
KCBT Wheat
$5.21
$4.91
$4.95
$4.82
0.14
2.73%
July
MGEX Wheat
$5.30
$5.13
$5.15
$5.06
0.09
1.65%
July
Soybeans
$9.60
$9.54
$9.41
$9.38
0.03
0.35%
July
Soybean Meal
$278.40
$276.80
$275.60
$273.50
2.10
0.76%
July
Soybean Oil
$38.44
$37.54
$36.96
$37.61
0.65
1.76%
June
Live Cattle
$95.90
$93.25
$91.37
$90.52
0.85
0.93%
Aug
Feeder Cattle
$114.87
$112.98
$110.15
$108.42
1.73
1.57%
June
Lean Hogs
$85.52
$83.55
$81.45
$81.85
0.40
0.49%
July
Cotton
$80.71
$80.72
$82.97
$80.05
2.92
3.52%
July
Oats
$2.06
$1.96
$1.96
$1.91
0.05
2.55%
July
Rice
$11.75
$11.81
$12.20
$11.64
0.57
4.63%
 
Cattle futures closed almost one percent lower. Cash cattle prices dropped to $93-94 during the week, influenced by sliding boxed beef prices. USDA reported solid export demand for beef in the week ending May 20, but the buying either dried up or was eclipsed by a lack of U.S. buying interest. The choice cutout dropped $3.17 for the week and select was down $4.99, Friday to Friday. There likely was less U.S. interest, as retailers already had Memorial Day product bought, and would typically wait for holiday clearance data before doing any massive re-ordering.
 
Market Watch: While 2004 sticks in everyone’s mind, most of the Tuesday’s after Memorial Day are a lot quieter, and not nearly as bullish. USDA’s weekly crop progress and condition report is expected to be delayed until Tuesday evening, with Export Inspections on Tuesday morning. USDA Weekly Export Sales will be delayed until Friday morning. The June live cattle and US dollar index options will expire on Friday as well. Other than that, the trade will continue to focus on the economic upheaval in Europe and speculate on whether it will result in or foreshadows another round of problems in the U.S. economy.
 
There is a risk of loss in futures and options trading. 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, or of any particular risk management technique. 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 more extensive paid subscription and consulting services.
 
                                                                                                                                     

Euro Troubles Part II

May 21, 2010
 
Market Watch with Alan Brugler
May 21, 2010
 
Euro Troubles Part II
 
Trading was choppy this week in the commodity markets. Germany announced on the 18th that it was banning naked short selling of certain European bonds and shares of top German banks. The markets did not like this initially and this sent the dollar screaming higher which sent shock waves through the stock market and commodities market. Later in the week the Euro recovered against the dollar, and Corn rebounded but Soybeans were left behind. In the middle of the week commodities started to move on their own, independent of the outside markets. The DJIA finished at 10,193.39 for the week and up 125.38 for the day. Crude oil settled at $70.13, down $.67. The dollar index finished at 85.372. Gold finished the week at $1,177.50.
 
Corn had a net change of 1.65%, up 6 cents for the week. Net weekly export sales were up 1% from the prior four week average and shipments were down 5 % at 978,900 MT. China corn purchases were made official on this weeks export sales report with 239,000 MT for 2009/10 delivery and 130,000 MT for 2010/11 delivery. China was in the market again this week for more U.S. corn, purchasing another 118,000 MT for 2009/10 delivery. China plans to auction another 1 MMT of corn from their reserves in the north, about 20% more than auctions of the past three weeks. The weekly crop progress report showed corn planting at 87% as of last Sunday, that’s 26 points ahead of the five year average with emergence 16 points ahead of the five year average at 55%. Planting progress was slowed to a 6 point gain this week due to wet weather in much of the country. Trade estimates for next week’s crop progress report are looking for planting progress at 92 to 94%.
 
Wheat futures were steady to higher for the week. CBOT wheat finished the week at steady money with the KC wheat up 4 cents and the MGEX 2 cents higher than last Friday’s close. On May 19th the CBOT began tracking the components that will set the VSR (variable storage rate) for SRW wheat. The CBOT will track the data for five weeks before making their determination of whether to raise storage rates which is intended to improve convergence between cash and futures wheat prices. The weekly export sales were 37% higher than the four week average with Japan and Mexico the main buyers for 2009/10 delivery. Sales for 2010/11 delivery were 205,200 MT down 24% for new crop four week average. Spring wheat planting is basically on par with the five year average but 30 points ahead of last year.  
 
Soybeans just can’t seem to get their groove back and ended 13 cents lower for the week closing below the weekly trend line. The retreating dollar this week was supportive to the feed grains but failed to impact the beans in a positive way. China’s continued buying of U.S. soybeans has limited the decline. Accumulated sales to China for 2009/10 delivery are at 21.479 MMT. Plus 2010/11 China sales are at 2.794 MMT. China may come to the U.S. sooner versus later for more 2009/10 because Argentine farmers are holding tight to the remaining 30 MMT of their unsold crop as a hedge against Argentine currency concerns. Roughly 25 MMT of the 55 MMT crop has been sold. The trade is also awaiting the passing of U.S. biodiesel legislation that would extend the $1.00 blend credit through December 2010.
 
July Cotton ended up for the week. Planting progress in the US was ahead of the 5 year average and well ahead of last year. Aside from the currency moves, China and India were in the spotlight this week. Being the two largest world producers and consumers this is not unusual. China issued import quotas of 800,000 MMT which were fully subscribed. China also had weather issues which damaged their cotton crop. India lifted the ban on exports of cotton due to the unrest it has caused with the ginners but it is restricting the exports that it allows.
 
Hog futures closed $2.10 or -2.51% lower for the week. The monthly Cold Storage report showed 482.524 million pounds of pork in the cooler as of April 30 that compares to 612.290 million pounds for April 30, 2009, or 22% less than a year ago. The national barrow/gilt price was $1.48 lower, eastern Corn Belt $1.44 lower, western Corn Belt $1.59 lower and Iowa/Minnesota $2.12 lower. Hog slaughter was up 3.5% from last week but year to date totals are down 4.2% from a year ago.
 
Below is a table showing the net weekly changes and 4 week history of selected agricultural futures:
 
Market Watch
 
 
 
 
Weekly
Weekly
Month
04/30/10
05/07/10
05/14/10
05/21/10
Change
% Change
July
Corn
$3.75
$3.72
$3.63
$3.69
0.06
1.65%
July
CBOT Wheat
$5.03
$5.11
$4.72
$4.72
0.00
0.11%
July
KCBT Wheat
$5.15
$5.21
$4.91
$4.95
0.04
0.81%
July
MGEX Wheat
$5.28
$5.30
$5.13
$5.15
0.02
0.34%
July
Soybeans
$9.99
$9.60
$9.54
$9.41
0.13
1.31%
July
Soybean Meal
$293.10
$278.40
$276.80
$275.60
1.20
0.43%
July
Soybean Oil
$38.93
$38.44
$37.54
$36.96
0.58
1.55%
June
Live Cattle
$94.22
$95.90
$93.25
$91.37
1.88
2.02%
May
Feeder Cattle
$112.80
$112.42
$110.22
$108.75
1.47
1.33%
June
Lean Hogs
$86.32
$85.52
$83.55
$81.45
2.10
2.51%
July
Cotton
$84.13
$80.71
$80.72
$82.97
2.25
2.79%
July
Oats
$2.14
$2.06
$1.96
$1.96
0.00
0.13%
July
Rice
$12.61
$11.75
$11.81
$12.20
0.40
3.35%
 
Cattle futures closed 2.02% lower for the week, down $1.88. Beef exports for the week were good at 15,700 MT. Boxed beef prices did slip some more to $167.20 on the Choice, down $2.06 and select finished at $161.06, down $3.26. Cash cattle prices were 153-157 in the north and 96 in the south this week. Beef production was up 1.4% from last week and down 2.8% from a year ago. Year to date cattle slaughter is ahead of last year by 1.2% but weights are running about 17 pounds per head below a year ago. Cattle on Feed for May 1, 2010 showed 96.59% of last year, April placements were 101.81% of last year and April marketings were 99.09% of last year.
 
Market Watch: The euro drama could continue next week but will likely not be quite as volatile as the past two weeks. Be looking out for the Crop Progress Report out Monday, along with the Census Crush and Cotton Consumption and Export sales reports all out Thursday morning. The significant economic reports coming up next week are the Home Sales Reports and GDP, Personal Income and Chicago PPI, weekly Energy Stocks, Jobless Claims and the Consumer Confidence Report.
 
There is a risk of loss in futures and options trading. 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, or of any particular risk management technique. 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 more extensive paid subscription and consulting services.
 
                                                                                                                                      Copyright 2010 Brugler Marketing & Management, LLC

European Mis-Adventures

May 14, 2010
 


Market Watch with Alan Brugler
May 14, 2010
 
European Mis-Adventures
 
The country and really the world had another wild week in the financial and commodity markets. The DJIA finished at 10,620.16, up 239.73 for the week and down 162.79 for the day. Crude oil has dropped over $16/barrel in the past two weeks from the May 3rd high with crude oil stocks continuing to build despite the near 210,000 gallons of oil pouring into the Gulf daily since the April 20th explosion.  The dollar index finished at 86.080 after making a new six week high, gaining significantly against the euro and the euro finishing at 1.2391, with a low of 1.2355 almost touching the 2008 banking crisis low of 1.2326. Gold finished the week at $1,227.80 after new all time highs at $1,249.20.
 
Corn had a net change of -2.42%, down 9 cents for the week. Rumors of China corn purchases ran corn prices up earlier in the week but then the old buy the rumor sell the fact adage took over with the official announcement of 369,000 MT of corn sold to China. The largest portion of that sale, 239,000 MT, is for 2009/10 delivery. The crop progress report showed corn planting at 81% as of last Sunday, that’s 19 points ahead of the five year average with emergence 18 points ahead of the five year average. Planting progress was slowed dramatically this week by wet weather, and replanting will have to be done in several areas due to either flooding or freeze damage. The USDA crop report was also out this week and the government is looking for record corn production of 13.370 billion bushels with an increase of 2010/11 carryout to 1.818 billion bushels.
 
Wheat futures dropped 7.64% closing 39 cents lower on the CBOT. The bear story in wheat is no secret, with the global stocks/use ratio at decade highs. The drop in the euro has made European wheat more attractive to the world buyers but the U.S. made some sales before the drop occurred this week selling a net 244,400 MT for 2009/10 delivery and 241,000 MT for 2010/11 delivery as of May 6th sales.  USDA’s WASDE report is projecting another increase in world wheat ending stocks to 198.09 MMT for 2010/11. U.S ending stocks are projected at 997 million bushels, 47 million bushels over 2009 estimates.
 
Soybeans made an effort early in the week to rally but met with technical resistance at the 40 day moving average and ended the week - .068% or down 6 cents for the week. The stronger dollar definitely played a significant part in the lower money but also the fact that planting is 11 points ahead of the five year average with 30% of the crop planted. USDA is projecting a significant increase in U.S. carryout for 2010/11 at 365 million bushels with the beginning stocks carried over from 2009/10 giving the soybeans a good start for the marketing year. Bean oil ending stocks are expected to decline to 2,747 million pounds and soybean meal stocks stay the same at 300,000 short tons. World soybean ending stocks are projected to increase to 66.09 MMT from 63.76 MMT in 2009/10 and 43.04 MMT in 2008/09 on increased production from the U.S. and South America. NOPA’s crush report on Friday was also bearish, showing a sharp reduction in monthly crush but also a buildup in soy oil stocks.    
 
Cotton futures were flat by weeks end. Weekly export sales were healthy coming in, 58% higher than the previous week. Crude oil was sharply lower for the week, continuing the multi-week slide which lowers the input cost for synthetic fibers that compete with cotton. Planting progress in the U.S. was on par with the 5 year average pace at 34% planted. Cert stocks continued their build earlier in the week but slowed later in the week ending at 1,062,135. Tuesday’s crop report was mildly bearish for old crop and mildly bullish for new crop. The USDA report added .1 million bales to ending stocks leaving ending stocks at a still small 3.1 million bales, which leaves beginning stocks very low for next year and balances out the surge in production to 16.7 million bales projected in 2010/11 from 12.2 million in 2009/10. In addition to the short beginning stocks, export estimates for 2010/11 were raised to 13.5 million bales for the 2010/11 marketing year from 12 the previous year. China’s consumption is projected to increase 3% to 49 million bales.
 
Hog futures lost $1.97 or 2.3% for the week. Pork production for the week ending May 15th is expected to hit 397.9 million pounds with the year to date total at 8,205.2 million pounds, 4.5% below last year for this week. Slaughter is down 4.3% from a year ago. Cash prices remained firm this week with packers cutting kill hours in order to maintain their margin. Market ready hogs may also be a factor. Sow slaughter at 2.7% is down .2% from a year ago, which could mean some Sow retention or it might just be a reflection of decreased slaughter. On the WASDE report this week, USDA showed a decrease in pork production for 2010 of 762 million pounds from 2009 at 22,237 million pounds and pork production projected to increase in 2011 to 22,705 million pounds. The largest quarter decline is in the April through June time frame at 5,310 million pounds with third quarter numbers increasing 110 million pounds to 5,420 and fourth quarter numbers at 5,900 million pounds.
 
Below is a table showing the net weekly changes and 4 week history of selected agricultural futures:
 
 
 
Market Watch
 
 
 
 
Weekly
Weekly
Month
04/23/10
04/30/10
05/07/10
05/14/10
Change
% Change
July
Corn
$3.61
$3.75
$3.72
$3.63
0.09
2.42%
July
CBOT Wheat
$5.06
$5.03
$5.11
$4.72
0.39
7.64%
July
KCBT Wheat
$5.17
$5.15
$5.21
$4.91
0.30
5.76%
July
MGEX Wheat
$5.38
$5.28
$5.30
$5.13
0.17
3.21%
July
Soybeans
$10.10
$9.99
$9.60
$9.54
0.06
0.68%
July
Soybean Meal
$292.20
$293.10
$278.40
$276.80
1.60
0.57%
July
Soybean Oil
$39.86
$38.93
$38.44
$37.54
0.90
2.34%
June
Live Cattle
$94.83
$94.22
$95.90
$93.25
2.65
2.76%
May
Feeder Cattle
$112.58
$112.80
$112.42
$110.22
2.20
1.96%
June
Lean Hogs
$85.17
$86.32
$85.52
$83.55
1.97
2.30%
July
Cotton
$86.20
$84.13
$80.71
$80.72
0.01
0.01%
July
Oats
$2.13
$2.14
$2.06
$1.96
0.10
4.98%
July
Rice
$12.69
$12.61
$11.75
$11.81
0.06
0.51%
 
Cattle futures closed 2.76% lower for the week, down $2.65 and finished Friday below the 40 day moving average on all the 2010 contracts. Beef exports for the week were good at 12,700 MT. Boxed beef prices did slip below the $170.00 mark on the Choice and ended the week at $169.26, down $0.53 and at $164.32, down $1.84 for the Select. Cash cattle prices were active Monday through Wednesday.  Most of the cattle sold between $100.00 and $101.00 in the live and $161 to $163 in the dressed. Late week trade was $98-99. Beef production was down .6% from last week and down 1% from a year ago. Year to date cattle slaughter is ahead of last year by 1.3% but weights are running about 10 pounds per critter below a year ago.  
 
Market Watch: The main concern coming into the week of May 17 will still be the status of the euro currency and the EU economy. The October of 2008 low on the euro is a critical level of support that would be a good area to get a short covering bounce from, but if asset holders feel there is too much at risk, they will be taking a risk aversion stance. That has implications for the value of the dollar, and thus for US exports and for commodity prices in dollar terms. We’re a world economy and changes in one country can impact all of us. The significant economic reports coming up next week are the monthly Housing Starts and Permits Report and Producer Price Index, the weekly Energy Stocks and Jobless Claims and the USDA Monthly Cattle on Feed and Cold Storage reports.
 
There is a risk of loss in futures and options trading. 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, or of any particular risk management technique. 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 more extensive paid subscription and consulting services.
 
                                                                                                                                      Copyright 2010 Brugler Marketing & Management, LLC

Riding Out the Storm

May 07, 2010
 

Market Watch with Alan Brugler
May 7, 2010
 
Riding Out The Storm
 
This was a volatile week with a market down swing in international equity markets and the largest intraday point drop in the DJIA ever of nearly 1000 points. There were riots in the streets of Greece, the VIX hitting a 1 year high at 41.37,  jobs data showing a 290,000 jobs increase and an increase of the unemployment rate from 9.7% to 9.9% due to new job seekers. The DJIA finished at 10,380.06 down 5.7% for the week, crude oil was down 13% this week at 75.20, the dollar index finished at 84.42 after a wild week with the dollar gaining significantly against the euro and the euro finishing at $1.275. Gold finished at $1,208.10 near record highs.
 
Corn had a net change of .41%, down 1.5 cents for the week. Net weekly export sales were a marketing year high as of last Thursday with the effects of the outside markets on corn prices limited by ideas China has a renewed interest in U.S. corn. China’s 115,000 MT purchase of corn last week showed up in the export data this week. Informa is projecting 2010 corn acres will come in at 89.60 million acres on USDA’s supply demand report next Tuesday, May 11th. The average analysts’ estimates for corn ending stocks are showing a decline for 2010/11 and a reduction from the April report for the 2009/10 marketing year. Estimates for 2009/10 are 1,865.1 million bushels and are 1,861.5 for 2010/11 marketing year. Old crop corn futures held the 18 and 40 day moving average for the week.

             Wheat futures were relatively quiet for the week. The bear story in wheat is well known, with the global stocks/use ratio at decade highs. However, there is an old trade axiom that “the bear market’s over when bad news fails to make it go down”. Wheat has rallied despite favorable crop condition ratings in the U.S., welcome rains in the EU and Canada, and the stock market meltdown. That doesn’t mean the market can’t drop again under harvest hedge pressure or an index fund retreat, but it suggests that prices had dropped enough to represent something close to “value”. Speaking of harvest, the first new crop loads are coming into elevators in Texas. The Kansas WQT is projecting the crop there at 333 million bushels, which implies a USDA May estimate around 337 million based on recent history. The tour estimate can be more than 8% away from USDA final production, and thus should be viewed only as an indication.
 
Soybeans were hit pretty hard this week, and the tie in to the US dollar action was a lot stronger. The dollar was particularly strong vs. the euro, and instability is the watch word in the EU because of the sovereign debt crisis with Greece, Portugal and Spain. Total export commitments for China to date for the 2009/10 marketing year are at 21,939,600 MT with 2010/11 outstanding sales at 2,557,500 MT. In the first planting progress report of the year, USDA said 15% of the beans were in the ground. Cold and wet weather limited the seed germination and disrupted planting this past week. Brazil’s harvest is 97% completed, and farmer selling has picked up there thanks to the strength of the dollar and corresponding weakening of the Real.  
 
Cotton futures were down again on the week, by 4.07 percent. Weekly export sales were above most trade estimates coming into the report, but that took a back seat to the videos of rioting in the streets in Greece and the fleeting 1000 point melt down in the Dow on Thursday afternoon. Those raised questions about economic stability and thus consumer demand. Crude oil was also sharply lower for the week, dropping the input cost for synthetic fibers that compete with cotton. Planting progress in the U.S. was close to the 5 year average pace. Flooding in the Delta/Mid-South region slowed planting.
 
Hog futures pulled back, losing 114% for the week. Futures were carrying a substantial premium to the CME Lean Hog Index used to settle May when it expires on the 14th. The sharp rise in the pork cutouts slowed, creating uncertainty about whether the hog prices would get all the way to the future’s price level. The lean pork cutout was 89.45 for the week, 99.4% of last week’s cutout.
 
Below is a table showing the net weekly changes and 4 week history of selected agricultural futures:
 
 
 
Market Watch
 
 
 
 
Weekly
Weekly
Month
04/16/10
04/23/10
04/30/10
05/07/10
Change
% Change
May
Corn
$3.64
$3.53
$3.66
$3.65
0.02
0.41%
May
CBOT Wheat
$4.91
$4.93
$4.92
$5.00
0.09
1.73%
May
KCBT Wheat
$5.07
$5.06
$5.06
$5.13
0.07
1.38%
May
MGEX Wheat
$5.20
$5.27
$5.26
$5.30
0.04
0.67%
May
Soybeans
$9.85
$10.00
$9.90
$9.51
0.39
3.92%
May
Soybean Meal
$280.90
$292.30
$291.30
$276.40
14.90
5.12%
May
Soybean Oil
$39.80
$39.35
$38.58
$38.13
0.45
1.17%
June
Live Cattle
$94.65
$94.83
$94.22
$95.90
1.68
1.78%
May
Feeder Cattle
$112.68
$112.58
$112.80
$112.42
0.38
0.34%
May
Lean Hogs
$86.42
$87.40
$89.52
$88.50
1.02
1.14%
July
Cotton
$81.59
$86.20
$84.13
$80.71
3.42
4.07%
May
Oats
$2.15
$2.05
$2.05
$2.01
0.04
2.07%
May
Rice
$12.81
$12.41
$12.36
$11.54
0.82
6.64%
 
Cattle futures were a rare bullish exception for the week if you’ll pardon the pun. Wholesale beef prices have been strong, with choice boxes trading at $171.04, up .49%. Tight ready cattle supplies, light carcass weights and a strong export program thus far in 2010 all contribute to that strength in product value. Packers were buying cattle on Monday and Tuesday, rather than waiting for the usual late Thursday and Friday flurry. That’s because they wanted to get the available cattle before somebody else did! Cash traded mostly $98.50 to $100 per hundred on the hoof.
 
Market Watch: The main concern coming into the week of May 10 will still be the status of the euro currency and the economies in the eurozone. That has implications for the value of the dollar, and thus for US exports and for commodity prices in dollar terms. Assuming no new blow ups, attention will shift to Tuesday morning’s USDA Crop Production and WASDE reports. This report will be the first attempt by USDA since the Outlook Forum to project 2010/11 supply and demand for the world grains and oilseeds, and to project fall 2011 ending stocks. There will also be some interest in weekly Export Sales data on Thursday morning, and in the NOPA monthly crush report scheduled for Friday. Friday will also be the last trading day for May grain futures, as well as hogs.  
 
There is a risk of loss in futures and options trading. 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, or of any particular risk management technique. 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 more extensive paid subscription and consulting services.
 
                                                                                                                                      Copyright 2010 Brugler Marketing & Management, LLC
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