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October 2012 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.

Spooks, Ghosts and Graveyards

Oct 26, 2012

 

Brugler

Market Watch with Alan Brugler

October 26, 2012

 Spooks, Ghosts and Graveyards

It is tempting to use various Halloween adjectives in a pre-holiday column like this one. Too tempting for me to refrain! We routinely talk about zombies in the context of options positions that have gone close to zero value but come back to life ahead of expiration. There are of course ghosts of bull markets past, but they fly in all directions. For our primary theme, we settle on bulls being spooked by poor export sales, with corn and cotton being the examples. Soybeans whistled past the graveyard, with their confidence boosted by a diet of export sales reports released under the USDA daily reporting system.

Corn futures lost 3.12% for the week after posting gains the two previous weeks. Ongoing poor export sales and a rising US dollar index hurt the market, with traders beginning to question whether USDA is still high on projected exports for the year. Weekly export sales were again very weak at only 142,300 MT. The number was complicated by several switches out of the "unknown" category, which means sales were showing but they were already on the books. Total commitments are down 48% from last year at this time. China also cancelled 120,300 MT. Average daily ethanol production rose 4,000 bpd from the previous week. Ethanol stocks dropped to 18.8 million barrels.

Soybeans rose 1.76% or 27 cents per bushel for the week. They posted several strong days before giving back a little on Friday due to profit taking. Weekly export sales were about as expected at 522,200 MT. December meal futures rose nearly $20 per ton. China is still the dominant soybean buyer. US export shipments are ramping up sharply, as has been expected since the extent of the South American drought became obvious back in the spring. Export inspections were over 61 million bushels in the Monday report. The Thursday export report, which includes a few different days, showed 1.61 MMT (60.3 million bushels). Of those, China was the destination for 41.l7 million bushels.   

Chicago futures were higher for the week, while the two hard wheat exchanges posted losses in the nearby December contracts. Weekly export sales improved, beating expectations at 572,000 MT. The US is still a little too expensive to compete with EU wheat into the North African and Middle East markets after freight is included. EU futures are rising against Chicago as they capture more sales, and are expected to eventually reach a tipping point where US offers are competitive. The Dow Jones- UBS index indicated that it will include KC hard wheat futures in the index for 2013. Maybe it is not a coincidence that CME Group is acquiring the KC exchange! Depending on January price levels and the total dollars invested in the index instruments, the change is expected to result in buying of 20,000 or more KC contracts, and selling of a larger number of Chicago contracts to meet the new target allocation percentages. 

Cotton futures took a pretty large hit for the week, retreating 5.8%. USDA put export sales at only 34,500 RB of upland for 2012/13 and 13,200 RB for 2013/14. That was a marked slowdown, aggravated by a Bangladesh cancellation of 74,700 RB. Net pima sales did rise to 14,500 RB. Cotlook already raised projected global production by another 2.5% from their previous estimate, and increased projected global ending stocks. With the dollar also rising for most of the week, cotton export prospects would have dimmed at the prices we were trading a week ago. The market made the adjustment.

 

Commodity

 

 

 

 

Weekly

Weekly

Month

10/05/12

10/12/12

10/19/12

10/26/12

Change

% Change

Dec

Corn

$7.48

$7.53

$7.62

$7.38

($0.24)

-3.12%

Dec

CBOT Wheat

$8.58

$8.57

$8.73

$8.64

($0.09)

-1.00%

Dec

KCBT Wheat

$8.78

$8.90

$9.06

$9.09

$0.04

0.41%

Dec

MGEX Wheat

$9.18

$9.24

$9.38

$9.40

$0.02

0.21%

Nov

Soybeans

$15.52

$15.23

$15.34

$15.61

$0.27

1.76%

Dec

Soybean Meal

$471.20

$465.20

$463.80

$483.40

$19.60

4.23%

Dec

Soybean Oil

$51.19

$50.67

$51.58

$50.96

($0.62)

-1.20%

Oct

Live Cattle

$123.05

$123.90

$126.30

$125.50

($0.80)

-0.63%

Oct

Feeder Cattle

$144.83

$143.10

$146.15

$145.33

($0.82)

-0.56%

Dec

Lean Hogs

$76.55

$78.37

$79.63

$78.90

($0.72)

-0.91%

Dec

Cotton

$71.49

$71.36

$76.88

$72.42

($4.46)

-5.80%

Dec

Oats

$3.67

$3.92

$3.94

$3.90

($0.04)

-1.14%

Nov

Rice

$15.11

$15.03

$15.02

$14.80

($0.23)

-1.50%

 

Cattle futures lost 80 cents per cwt. for the week. The cash cattle market was mostly steady to $1 higher for the week. Wholesale beef prices were mixed. Choice boxed beef had gained $5.01 the previous week, but was up only 14 cents this week following a sharp decline in the quotes on Friday. Choice beef prices were less than a dollar from all time highs before backing off. Select product was down 0.4% on a Friday/Friday basis. Estimated beef production for the week was down 2.2% from the same week in 2011, and tonnage for 2012 YTD is 2.0% below last year. Weekly export sales at 16,600 MT were up 15% from the previous week.

Hog futures lost 72 cents or 0.91%. That ended a string of 6 weeks of strong gains. Estimated pork production for the week was down 0.1% from the previous week, and up 1.4% from the same week in 2011. Pork production YTD is up 2.4%. Estimated carcass weights are down 3 pounds from last year, which is offsetting the larger slaughter numbers to a degree. The pork carcass cutout value lost 4.36% for the week on a Friday/Friday basis, with sharp declines in hams and loins. The CME Lean Hog Index is $85.22, a $6.32 premium to nearby futures.

Market Watch:

Futures will begin the week reacting to any surprise positions inherited by the expiration of November futures options for grains on Friday. Monday also marks a full moon, quickly followed by Halloween on Wednesday. Wednesday is also month end, and quarter end for some hedge funds, so position adjustments will be a factor all week. USDA will issue the usual weekly Export Inspections report on Monday, along with Crop Progress.  Wednesday will mark the expiration of the October live cattle futures contract, and also the weekly ethanol production statistics from EIA. Thursday will feature the weekly Export Sales report, while Friday will be the expiration date for November live cattle options.

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. Visit our web site at https://www.bruglermarketing.com for more information on our consulting and advisory services for farm family enterprises and agribusinesses.

 

Copyright 2012 Brugler Marketing & Management, LLC

Things Have Changed!

Oct 19, 2012

 

Brugler

Market Watch with Alan Brugler

October 19, 2012

Things Have Changed! 

News networks were highlighting the 25th anniversary of the 1987 stock market crash on October 19. The focus was on the huge percentage losses in stock values that day around the world. The Dow Jones average lost more than 22.6% in one day, down 508 points to 1738.74. The futures exchanges were not immune, with over a billion dollars in margin calls to be collected and tense negotiations to make sure they had access to enough capital to stay open. Price changes since then have been revealing. In nominal dollars (not inflation adjusted), corn futures are up 406% since that date in 1987. Soybeans are up 280%. Nearby Chicago wheat is up 283%. Nearby cattle futures are up 184%. The Dow? Using the same Monday morning pre-crash value as the others, it is up 594%. Despite the crash on Black Monday, and the 2008/09 debacle, those 30 stocks have still outstripped commodity prices in dollar terms.

Corn futures worked 1.2% higher for the week, a 9 cent gain after a nickel gain the previous week. Weekly export sales were again very weak at only 166,700 MT. Average daily ethanol production dropped from the previous week. Ethanol weekly production slowed down. Ethanol stocks dropped to 19 million barrels despite the largest weekly import total since record keeping began in June 2010. Consulting firm Informa projected that 2013 US corn plantings will total 97.5 million acres, up less than a million from the current year.

Soybeans rose 0.77%, or 12 cents per bushel for the week. They posted several strong days before giving back a little on Friday due to profit taking. Weekly export sales were modest at 523,700 MT for both 2012/13 and 2013/14.  The Argentine government is now estimating soy production at 55 to 58 MMT for 2013, with USDA at the lower end of that range. Informa guesstimated 2013 US soybean acreage at 79.987 million, a record total if it happens. If the South American crop turns out as large as advertised, and if the US plants that large of a crop, and if US yields return to trendline, the train wreck potential expands exponentially for prices! That is a lot of "ifs", however.

All three wheat markets were higher this week, with Chicago posting the biggest gain after being the weakling the previous week. Weekly export sales improved, beating expectations at 410,000 MT. On Friday, a wire report indicated that Ukraine may run out of exportable wheat by mid to late November. That supported prices because of the potential impact on US exports in December. There was a 230,000 MT export sale announced to "unknown" on Friday as well. Dust storms in the Plains were severe enough to close interstate highways, and could result in some localized blowouts or soil drifting. Soil conservation practices are of course much, much better than they were in the 1930’s. Consultant Informa is projecting 2013 US wheat acreage at 56.8 million, up about a million acres from this year.

Nearby cotton futures shot up 7.7% this week, re-affirming the old trade axiom to "never sell a sleeping market". USDA put export sales at 206,200 RB for 2012/13 with net sales for 2013/14 at 13,200 RB for Upland Cotton or right at the upper end of trade guesses. Pima net sales were 2,700 RB. You couldn’t really point to known export sales for the rally. Potential for a squeeze in December futures got some play, with

 

 

Commodity

 

 

 

 

Weekly

Weekly

Month

09/28/12

10/05/12

10/12/12

10/19/12

Change

% Change

Dec

Corn

$7.56

$7.48

$7.53

$7.62

$0.09

1.16%

Dec

CBOT Wheat

$9.03

$8.58

$8.57

$8.73

$0.16

1.84%

Dec

KCBT Wheat

$9.28

$8.78

$8.90

$9.06

$0.15

1.71%

Dec

MGEX Wheat

$9.59

$9.18

$9.24

$9.38

$0.14

1.49%

Nov

Soybeans

$16.01

$15.52

$15.23

$15.34

$0.12

0.77%

Dec

Soybean Meal

$486.90

$471.20

$465.20

$463.80

($1.40)

-0.30%

Dec

Soybean Oil

$52.66

$51.19

$50.67

$51.58

$0.91

1.80%

Oct

Live Cattle

$122.08

$123.05

$123.90

$126.30

$2.40

1.94%

Oct

Feeder Cattle

$143.80

$144.83

$143.10

$146.15

$3.05

2.13%

Dec

Lean Hogs

$73.75

$76.55

$78.37

$79.63

$1.26

1.60%

Dec

Cotton

$70.65

$71.49

$71.36

$76.88

$5.52

7.74%

Dec

Oats

$3.71

$3.67

$3.92

$3.94

$0.02

0.57%

Nov

Rice

$15.48

$15.11

$15.03

$15.02

($0.01)

-0.03%

 

Cattle futures rose a sharp $2.40/cwt. this past week, pulled higher by rising beef product value and light slaughter. While packers have been somewhat successful at backing cattle into the October marketing "hole" the numbers are still on the light side and even steady demand firms prices. The Cattle on Feed report showed slightly smaller October 1 numbers than the trade expected pre-report, at 97.4% of year ago. The cash cattle market was mostly $1-2 higher for the week in the live cattle. Sales hit $127 in Texas and KS, with $202 in the dressed. NE was $197-198 in the dressed. Wholesale beef prices were sharply higher, with choice cutouts up 2.6% for the week. Select product was up 1.9% on a Friday/Friday basis. Estimated beef production for the week was down 0.7% from the same week in 2011, and tonnage for 2012 YTD is 2.0% below last year. Weekly export sales at 14,500 MT were down slightly from the previous week.


Hog futures rose another 1.6% this week after a 1.75% rise the week before. This is the 6th week of strong gains. Estimated pork production for the week was down 0.2% from the previous week, and up 1.5% from the same week in 2011. Pork production YTD is up 2.4%. Estimated carcass weights are down 4 pounds from last year, which is offsetting the larger slaughter numbers. The pork carcass cutout value rose 2.3% for the week on a Friday/Friday basis, led by ribs and loins. The increasing product value allowed cash hogs and the CME Lean Hog Index to rise, taking futures with them. 

Market Watch

Cattle traders will begin the week reacting to Friday evening’s Cattle on Feed report. The market will continue to be interested in US export sales progress, with questions about whether corn sales are running too slow, and questions about whether soybean sales are running too fast (to hit USDA projections for the year).  USDA will release the weekly export inspections report on Monday morning, and weekly Export Sales on Thursday morning. Harvest is rapidly coming to a close and becoming less of a market factor. USDA will release an update on Monday at 3:00 pm CDT. The main monthly report for the week is the Cold Storage report on Monday evening. The Fed Open Market Committee is scheduled to meet on Tuesday and Wednesday, with the potential to do something market moving although no new initiatives are expected. Feeder cattle options and futures will expire on Thursday. November grain options will expire on Friday the 26th

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. Visit our web site at https://www.bruglermarketing.com for more information on our consulting and advisory services for farm family enterprises and agribusinesses.

 

Copyright 2012 Brugler Marketing & Management, LLC

Landing On Some Hard Numbers

Oct 12, 2012

Brugler 

Market Watch with Alan Brugler

October 12, 2012

 Landing on Some Hard Numbers

Continuing our airport analogy from last week, we made our connecting flight on Thursday, with USDA rolling out some in some cases surprising crop numbers. The corn market caught a tailwind from tight projected US and world corn ending stocks, while the bean bulls had to return to the runway because of heavier projected ending stocks for 2013. 

Corn futures managed a nickel gain for the week after coming within pennies of limit up on Thursday following the USDA reports. That tells you things were weak early and also retreated on Friday. Weekly export sales were delayed until Friday and very disappointing at only 14,200 MT. Of that figure, 10,000 MT was for 2013/14 delivery. The current year net sales were battered by a number of cancellations. Ethanol weekly production rebounded 15,000 barrels per day from the prior week. Ethanol stocks ballooned, however, as the market failed to absorb the extra supply. The USDA report numbers themselves were bullish. USDA cut projected average yield to 122 bushels per acre, and added only 300,000 harvested acres based on FSA data. Projected ending stocks were dropped to current pipeline level at 619 million bushels. The cash average price midpoint dropped 10 cents to $7.80.

Soybeans dropped 1.9% for the week, despite a solid day on Thursday. Weekly export sales were modest at 523,700 MT for both 2012/13 and 2013/14.  USDA also reported 180,000 MT of new export business to China under the daily reporting system on Friday, along with 21,000 MT of soy oil sold to China for 2012/13 delivery. None of that helped, with futures down 26 cents after the export numbers came out. The USDA numbers on Thursday were mostly bearish. Production was hiked to 2.86 billion bushels, and average yield rose to 37.8 bushels per acre on the highest average bean weight per pod in 10 years in the objective yield plots. Harvested acres rose 1.1 million after the FSA data was incorporated. The good news for producers is that the increased production is all expected to leave the country. USDA bumped up exports by triple digits, leaving ending stocks at a still snug 130 million bushels. The average cash price midpoint dropped to $15.25. November futures settled at $15.225 on Friday.

Two of the three wheat markets were higher this week, while Chicago lost a penny per bushel. Poor weekly export sales are a problem. USDA had to cut projected exports for the year because the cumulative bookings are running too far off of the pace needed to meet the old 1.2 billion bushel forecast. USDA did cut projected ending stocks for 2013 by 44 million bushels to 654 million. They raised feed use to reflect the larger pace of first quarter consumption shown by the September 28 grain stocks report. The world ending stocks estimate continues to shrink, and is now at 173 MMT after USDA took 3 MMT off of Australia and made some other adjustments.  

Nearby cotton futures lost 0.18% for the week, a moral victory for the bulls. USDA raised projected US ending stocks to 5.6 million bales, with average yield rising to 795 pounds per acre. Even worse, the projected world ending stocks were bumped up to 79.11 million bales, a record large surplus that represents 270 days of use at the current global consumption rate. China is a problem, as their stocks rebuilding program in 2011/12 was a little too successful. They are staring at a multi-year high in stocks and a multi-year drop in consumption/exports of finished goods. USDA’s projection of their ending stocks would leave China holding 46% of the global surplus at the end of July.

 

Commodity

 

 

 

 

Weekly

Weekly

Month

09/21/12

09/28/12

10/05/12

10/12/12

Change

% Change

Dec

Corn

$7.48

$7.56

$7.48

$7.53

$0.05

0.64%

Dec

CBOT Wheat

$8.97

$9.03

$8.58

$8.57

($0.01)

-0.09%

Dec

KCBT Wheat

$9.26

$9.28

$8.78

$8.90

$0.12

1.37%

Dec

MGEX Wheat

$9.58

$9.59

$9.18

$9.24

$0.06

0.65%

Nov

Soybeans

$16.22

$16.01

$15.52

$15.23

($0.29)

-1.87%

Oct

Soybean Meal

$484.50

$487.00

$474.70

$474.30

($0.40)

-0.08%

Oct

Soybean Oil

$54.45

$52.18

$50.76

$49.89

($0.87)

-1.71%

Oct

Live Cattle

$125.53

$122.08

$123.05

$123.90

$0.85

0.69%

Sep

Feeder Cattle

$147.23

$143.80

$144.83

$143.10

($1.73)

-1.19%

Oct

Lean Hogs

$75.80

$77.18

$81.33

$82.75

$1.43

1.75%

Dec

Cotton

$73.25

$70.65

$71.49

$71.36

($0.13)

-0.18%

Dec

Oats

$3.76

$3.71

$3.67

$3.92

$0.25

6.74%

Nov

Rice

$15.24

$15.48

$15.11

$15.03

($0.08)

-0.53%

 

Cattle futures gained 85 cents for the week after a similar advance the week before. The cash cattle market was mostly $1 higher, and October futures tracked the increase in value. Wholesale beef prices were higher, with choice cutouts up 0.9% for the week and select product was up 0.8% on a Friday/Friday basis. Estimated beef production for the week was down 1.3% from the same week in 2011, and tonnage for 2012 YTD is now 2.0% below last year. Weekly export sales at 15,100 MT were down slightly from the previous week.

Hog futures rose another 1.75% this week after a 5.4% jump the prior week. This is the 5th week of strong gains. Estimated pork production for the week was up 1.6% from the previous week, and up 1.9% from the same week in 2011. Pork production YTD is up 2.4%. Estimated carcass weights are down 3 pounds from last year, which is offsetting the larger slaughter numbers. The pork carcass cutout value rose 3.28% for the week on a Friday/Friday basis, led by hams. The increasing product value allowed hogs and the CME Lean Hog Index to rise, along with October futures which converge with the Index at expiration.

Market Watch:

The market will start this week looking at the NOPA monthly crush report on Monday morning. Since Census discontinued monthly Crush reports in 2011, the NOPA series has been important for getting a grasp on trends in crush and product production. USDA will also issue weekly Export Inspections and Crop Progress reports on Monday. The weekly Export Sales report on Thursday is also significant given the huge percentage of expected US soybean sales that are already on the books, and the reverse situation in corn. Livestock producers will have the monthly Cattle on Feed report on Friday the 19th. A number of financial market options also expire on Friday (November grain options don’t expire until the following week).

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. Visit our web site at https://www.bruglermarketing.com for more information on our consulting and advisory services for farm family enterprises and agribusinesses.

Copyright 2012 Brugler Marketing & Management, LLC

Waiting for a Connecting Flight

Oct 05, 2012

Brugler 

Market Watch with Alan Brugler

October 5, 2012

 Waiting For A Connecting Flight 

Market activity this week kind of reminded us of waiting at an airport for a connecting flight. You are part way to the objective and just waiting for something to happen. While you are waiting, there can be some commotion (like a whole flight of people being told that their gate has changed) and both gold and crude oil saw some volatility this week, and the Dow Jones Industrial Average set a 5 year high early on Friday. The second flight for grain people is scheduled to take off on October 11, with the USDA crop production and WASDE supply/demand reports. We already have some weather information from the September 28 stocks reports, which told us how new crop beginning stocks will be changed, but there is a storm front coming in. That would be the incorporation of the FSA acreage data coupled with likely revisions in average yield estimates. The farmer portion of the yield estimate is likely to go up based on anecdotal information, but the USDA objective yield plots shouldn’t have changed a whole lot and they are part of the calculation which will dampen the overall effect. Let’s hope there isn’t too much fog!

Corn futures are back to where they were two weeks ago, failing to build upon the limit up move following the USDA Grain Stocks report, but also giving very little of the money back due to end user pricing on dips. Weekly export sales were better than the prior week, as low prices tend to cure low prices by stirring up buying interest. That also wasn’t saying much because the prior week sales had so many cancelations that they were just barely above zero. Ethanol weekly production dropped sharply this week, to the lowest average since the weekly reporting series began in 2010. Ethanol stocks were drawn down as consumption exceeded production. That was followed by a rally in gasoline which should stimulate additional ethanol use.

Soybeans dropped 3.1% for the week, despite a strong day on Thursday. Weekly export sales were way above trade estimates, with China buying 1.025 million metric tonnes. They clearly liked beans with a 15 handle in front of them rather than a 16 or 17.  US export sales for the year remain heavily front end loaded, with 82% of the USDA projected shipments for the year already on the sales book. Shipments as measured by the Export Inspections surged 41.7 million bushels and are now 31 million ahead of year ago after 27 days of activity. Brazilian planting is picking up steam, with dryness concerns in the northeastern portion of the growing area. Dryness during the equivalent of early April isn’t usually a problem for producers, who are focused on planting. Dry weather in fact tends to mean larger acreage.

The three wheat markets were all lower, by 4.2 to 5.3%. Those were big losses compared to the 1.1% drop in corn, and made wheat a trifle more competitive in feed rations if you have a weak enough basis. Poor weekly export sales are the main problem. Egypt continues to buy wheat, but still not US origin wheat. The latest sources were the EU and Argentina, with US offerings a little too high with freight costs included. US sales commitments are running behind, with only 40% of expected exports on the books. That commitment level would typically be 60% by now. There should be a window for increase US sales as Russian supplies have dried up and EU wheat becomes more expensive, but it will be a narrow window if Australia has anything close to a normal crop.

Nearby cotton futures gained nearly 1%, but the October contract being tracked had very little trading activity.  Weekly export sales were 241,000 running bales of upland and 7,000 RB of Pima. Export commitments are tracking right about where USDA expects them to be, with 50% of the year’s sales on the books. The average for this date is 49%. China is a problem, as their stocks rebuilding program in 2011/12 was a little too successful. They are staring at a multi-year high in stocks and a multi-year drop in consumption/exports of finished goods. If there is a silver lining it is the ownership of the stocks by their government. Chinese taxpayers can store cotton a long time if need be, but they probably won’t want to import ours if it means continuing to pay to store theirs. 

 

Commodity

 

 

 

 

Weekly

Weekly

Month

09/14/12

09/21/12

09/28/12

10/05/12

Change

% Change

Dec

Corn

$7.82

$7.48

$7.56

$7.48

($0.08)

-1.09%

Dec

CBOT Wheat

$9.24

$8.97

$9.03

$8.58

($0.45)

-4.99%

Dec

KCBT Wheat

$9.48

$9.26

$9.28

$8.78

($0.49)

-5.31%

Dec

MGEX Wheat

$9.78

$9.58

$9.59

$9.18

($0.40)

-4.20%

Nov

Soybeans

$17.39

$16.22

$16.01

$15.52

($0.50)

-3.09%

Oct

Soybean Meal

$523.50

$484.50

$487.00

$474.70

($12.30)

-2.53%

Oct

Soybean Oil

$56.97

$54.45

$52.18

$50.76

($1.42)

-2.72%

Oct

Live Cattle

$127.05

$125.53

$122.08

$123.05

$0.97

0.80%

Sep

Feeder Cattle

$146.63

$147.23

$143.80

$144.83

$1.03

0.71%

Oct

Lean Hogs

$74.03

$75.80

$77.18

$81.33

$4.15

5.38%

Oct

Cotton

$75.39

$72.00

$69.15

$69.80

$0.65

0.94%

Dec

Oats

$3.96

$3.76

$3.71

$3.67

($0.03)

-0.88%

Nov

Rice

$15.28

$15.24

$15.48

$15.11

($0.37)

-2.39%

 

Cattle futures gained 97 cents for the week after losing $3.45 the previous week. The cash cattle market was mostly $1 higher, and October futures tracked the increase in value. Wholesale beef prices were a mixed bag, with choice cutouts up 0.5% for the week but select product down 1.2% on a Friday/Friday basis. Estimated beef production for the week was down 5.4% from the same week in 2011, and tonnage for 2012 YTD is now 2.1% below last year. Weekly export sales at 15,800 MT were up 61% from the previous week. Shipments were even better at 17,100 MT. Cumulative sales are now running above year ago, based on the weekly reporting system. Official Census exports will vary. 

Hog futures jumped nearly 5.4% this week, a 4th week of strong gains. Estimated pork production for the week was up slightly from the previous week, but down 0.1% from the same week in 2011. That ended a string of weeks with 4% and 5% year over year rises in production. Pork production YTD is up 2.4%. The pork carcass cutout value rose to the highest level since August 24. IT was up 4.7% for the week, supporting cash hog prices and steady daily increase in the CME Lean Hog Index.

Market Watch:

Monday is first notice day for October cattle futures deliveries. Futures markets will be open. Government offices will be closed for the Columbus Day holiday (and Thanksgiving in Canada), so the usual Monday reports like Export Inspections and Crop Progress will be released on Tuesday. Tuesday will also be the last trading day for October cotton. The main USDA will reports for this coming week will be on Thursday morning, with the USDA Crop Production and Supply/Demand reports. USDA Weekly Export Sales will be delayed until Friday morning due to the Monday holiday.

 

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. Visit our web site at https://www.bruglermarketing.com for more information on our consulting and advisory services for farm family enterprises and agribusinesses.

Copyright 2012 Brugler Marketing & Management, LLC

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