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July 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.

Showers Too Late for Corn?

Jul 27, 2012

 

Brugler

Market Watch with Alan Brugler

July 27, 2012

 

Sprinkles too late?

 

This week we saw some rains in the Midwest and High Plains but areas were spotty and amounts had a wide variance. There were also high winds in some areas that literally flattened the corn with the corn mining the stalk to fill the ear. Since mid June moderate drought ratings for the continental U.S. have gone from 40 % to 64% and extreme to exceptional drought from 4% to 14% according to the U.S. Drought Monitor. Much of the corn is maturing far ahead of normal with some areas of southern Kansas and central Illinois reportedly already combining. World weather has also been extreme with northern Europe getting above normal rainfall and parts of southern Europe dry and hot. India is also way behind normal for their monsoon season. China however is receiving rains and growing conditions for the crops is thought to be adequate for most areas.

We have witnessed a pull back in the grains this week after reaching new all time highs in corn, soybeans and soybean meal the previous week. Chicago wheat rallied to take out 2011 highs but is still a long way from its exceptional all time high in 2008. Minneapolis wheat and KC wheat have yet to take out the 2011 highs. Nearby corn futures were down 3.15% for the week. We have been seeing demand destruction in the corn market with weekly export sales for both marketing years showing a net reduction this week. We have not seen that occurrence in the 22 years of weekly export history we have tracked.  Weekly ethanol production also dropped to the lowest level since weekly data releases were begun. If ethanol production continued at the current rate for a full year, corn use for ethanol would drop more than 700 million bushels from that seen this year. That is some significant price rationing, but also increases the need to feed corn due to the lack of DDG’s.

 

Commodity

 

 

 

 

Weekly

Weekly

Month

07/06/12

07/13/12

07/20/12

07/27/12

Change

% Change

Sep

Corn

$6.95

$7.41

$8.25

$7.99

($0.26)

-3.15%

Sep

CBOT Wheat

$8.06

$8.48

$9.43

$8.98

($0.45)

-4.80%

Sep

KCBT Wheat

$8.09

$8.51

$9.41

$9.06

($0.35)

-3.72%

Sep

MGEX Wheat

$9.06

$9.59

$10.32

$9.72

($0.59)

-5.77%

Aug

Soybeans

$15.86

$15.95

$17.58

$16.84

($0.73)

-4.17%

Aug

Soybean Meal

$461.50

$480.80

$543.00

$527.70

($15.30)

-2.82%

Aug

Soybean Oil

$53.44

$53.70

$54.36

$52.04

($2.32)

-4.27%

Aug

Live Cattle

$119.20

$117.20

$117.95

$119.60

$1.65

1.40%

Aug

Feeder Cattle

$146.53

$139.00

$136.10

$137.75

$1.65

1.21%

Aug

Lean Hogs

$93.30

$90.40

$93.70

$95.20

$1.50

1.60%

Oct

Cotton

$70.53

$71.76

$72.06

$70.73

($1.33)

-1.85%

Sep

Oats

$3.62

$3.73

$3.87

$3.77

($0.10)

-2.58%

Sep

Rice

$15.06

$15.29

$15.54

$15.60

$0.06

0.42%

 

Soybeans lost 4.17% for the week. Weekly soybean export sales were larger than expected for the reporting week ending July 19. With 79% of the crop blooming and 36% said to be setting pods, the Brugler500 index crop condition index is at 287. Compare that number to the same week in 1988 when the Brugler500 index was 303. Ratings are now lower than in 2008 and 1988. The Memphis based analytical firm Informa reduced their US soybean yields to 38.5 BPA and put projected production at 2.9 billion bushels.

The three wheat markets were all lower this week, by 3 to 5%. All three were up on Friday, with the gains in MPLS muted by the solid yields being reported by the Spring Wheat Quality Tour this week. The WQT put estimated average yield at 44.9 BPA, with 42.4 bushels per acre for durum. Weekly export sales were only 367,000 MT. That was down 11% from the previous week as price rationing begins to do its work. The IGC left projected world wheat production UNCH at 665 million metric tonnes.   The IGC left projected world wheat production UNCH at 665 million metric tonnes.  The IGC expects Russian output will fall to 45 MMT with a French firm estimating 47 MMT.

Nearby cotton futures dropped 1.85% this past week. USDA reported net weekly export sales for last week were 142,300 RB for Upland cotton and 10,800 RB for Pima for combined marketing years with a net reduction of 800 RB for 2011/12 Pima delivery. Total old crop commitments are 113% of the current USDA forecast for the year. They would typically be at 111% by now. The CFTC report on Friday afternoon showed Managed Money added to their net short position and Index Funds decreased their net long.

Cattle futures rose 1.4%, or $1.65 per cwt.  All but 20 cents of that gain came on Friday. Cash cattle prices were up $1-2 for the week. Wholesale beef prices slowed down. For the week, choice boxed beef was down $2.37, or 1.3%. Estimated beef production for the week was 2.6% smaller than the same week in 2011. YTD production is down 2.2%. Weekly beef export sales reported by USDA slowed further, due in part to the strength of the US dollar during the reporting period.
Hog futures were up $1.50 or 1.6% for the week. Pork production was up 1.7% from the previous week. It was still up 2.2% from the same week in 2011. Cumulative pork production for the year is 1.7% larger than last year on 1.2% more hogs slaughtered. Average weights are still running 3-4 pounds above last year.  The pork carcass cutout value was up $1.06/cwt this week or 1.16%. Pork bellies finally revealed hints of BLT demand, gaining 5.32% for the week.

 

Market Watch:

The market will begin the week with traders adjusting positions created by the expiration of the August soybean complex options on Friday and the resulting new futures positions. The main USDA reports this coming week will be the crop progress report Monday which has shown continued deterioration in the corn and soybeans week to week. Export sales will be Thursday along with EIA Gas Storage.  


 

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

Blazing Hot!

Jul 20, 2012

 

Brugler

Market Watch with Alan Brugler

July 22, 2012

Blazing Hot

Well over one thousand US counties have already been declared eligible for disaster loans because of the drought. It is hot, and it is dry. Many US states are looking at the highest average temperature for July ever or the second highest. It is always hot in the summertime, but this heat is bad for crops and bad for livestock. About the only winners are electric utilities and ice cream vendors!

Corn was 84 cents higher for the week, dwarfing the 13 cent gain from the previous week. Condition ratings are expected to decline on next week’s crop progress report. Yield estimates have been declining steadily, as weekly rain amounts of .25" or .50" aren’t enough when corn is using1-2" per week. The blistering heat in the red states is expected to continue throughout August, and is also correlated with losses of up to 25% of initial potential yield depending on how hot and for how long. The crop is definitely being hurried to maturity with maximum GDD accumulations. The Brugler500 crop condition index dropped to 281, the lowest for this week since the 252 rating in 1988. The market is doing its best to slow down use to fit the new supply reality. Ethanol production slowed to the lowest level since 2010, and export sales have slowed to a crawl. One side effect of reduced ethanol production is higher DDG and soybean meal prices due to the reduction in DDG availability.

 Soybeans were up another 10.2% for the week. Chinese buying is still out there, but may be slowing down as US prices get close to or above Chinese values after adding freight, tariffs and other costs. China bought 174,400 MT of old crop US beans, and no official new crop. US export commitments (shipments plus open contracts) fully cover the USDA export estimate for the year at 104% of final projection. Some sources are projecting U.S. soybean production at 80-83 MMT.  Up to one third of the Brazilian crop may already be forward sold, with planting not due to begin until after Labor Day. The Brugler500 index for soybean crop conditions dropped to 298 from 309. Ratings are now the lowest since 1988.

The three wheat markets finished the week 73 to 96 cents higher. Winter wheat harvest was 80% complete as of Sunday. Weekly export sales for the week ending July 5th were 589,200 MT, a better than expected figure even if cumulative commitments still lag year ago. Cumulative exports are 295 million bushels vs. 352 million at this point last year. Total export commitments YTD are 25% of the USDA’s recently raised forecast for the year. They typically would be 29% by now.

 

 

Commodity

 

 

 

 

Weekly

Weekly

Month

06/28/12

07/06/12

07/13/12

07/20/12

Change

% Change

Sep

Corn

$6.29

$6.95

$7.41

$8.25

$0.84

11.34%

Sep

CBOT Wheat

$7.57

$8.06

$8.48

$9.43

$0.96

11.27%

Sep

KCBT Wheat

$7.56

$8.09

$8.51

$9.41

$0.90

10.58%

Sep

MGEX Wheat

$8.45

$9.06

$9.59

$10.32

$0.73

7.56%

Aug

Soybeans

$14.82

$15.86

$15.95

$17.58

$1.63

10.21%

Aug

Soybean Meal

$429.50

$461.50

$480.80

$543.00

$62.20

12.94%

Aug

Soybean Oil

$52.39

$53.44

$53.70

$54.36

$0.66

1.23%

Aug

Live Cattle

$120.45

$119.20

$117.20

$117.95

$0.75

0.64%

Aug

Feeder Cattle

$151.45

$146.53

$139.00

$136.10

($2.90)

-2.09%

Aug

Lean Hogs

$94.78

$93.30

$90.40

$93.70

$3.30

3.65%

Oct

Cotton

$71.57

$70.53

$71.76

$72.06

$0.30

0.42%

Sep

Oats

$3.38

$3.62

$3.73

$3.87

$0.15

3.89%

Sep

Rice

$14.49

$15.06

$15.29

$15.54

$0.25

1.64%

 Nearby cotton futures were up 0.4% for the week. The good news is that cotton appears to be less affected by the US drought than it was last year. Crop condition ratings are holding up fairly well. Export sales were also net negative for quite a while last summer and fall. With two weeks left in the marketing year, merchants were still able to sell 41,600 RB of old crop upland cotton for export. New crop sales weren’t so exciting; at 34,100 RB with all year to get it shipped.

Cattle futures eked out a 75 cent net gain for the week. Wholesale beef prices were under pressure all week ending at $179.31 for choice boxes, down 2.5% from the previous week. On Friday afternoon, USDA unleashed a barrage of livestock reports. The Cattle report showed a larger than expected decline in the US cattle herd, down 2.2% from last July. Beef cow numbers were also down 2.9% and calf numbers under 500 lbs. were down 2.6% from year ago. Cattle are becoming scarcer. The Cattle on Feed report showed more cattle in the lot than a year ago, up 2.5% year/year. However, June placements were only 98.2% of last year and June marketings were down 6.5% from June 2011. Beef production YTD is down 2.3% from last year.

Lean Hog futures shot up 3.65% for the week. Pork production is slowing. Weekly production was down 0.4% from the previous week. Year to date production is now only 1.7% larger than last year. It had been up more than 2% a few weeks ago. Estimated hog weights are thought to be 2 pounds lower than last week, a function of both the heat and sharply escalating feed prices. Pork cutout prices were firmer for a change, up 1.9% for the week. Rib quotes were up 10.7% on a Friday/Friday basis, underpinning the rest.

Market Watch:

The market will begin this week again focusing on the weather forecasts, particularly looking for any dip in the temps or increase in precip that might boost yield potential for corn and soybeans. Livestock traders will start the week reacting to the raft of reports released this past Friday afternoon, including Cattle Inventory, Cattle on Feed, Cold Storage and Livestock slaughter. Grain traders will again expect a drop in weekly crop condition ratings in the Monday evening Crop Progress report from USDA. Friday will mark the expiration of the August options for grains, financials and nat gas.

The Brugler Marketing Summer Seminar will be held July 26-27 at the Hilton Garden Inn in Omaha. The Dayton, Ohio Seminar is July 30-31. The public is invited attend, but pre-registration is required. Go to the Seminar links on the Brugler Web site for an agenda and online registration. The site is https://www.bruglermarketing.com.

There is a risk of loss in futures and options trading. Such trading is not appropriate for all individuals and entities. Past performance is not necessarily indicative of future results.

Copyright 2012, Brugler Marketing & Management LLC.

Not a Cloud in the Western Sky

Jul 13, 2012

Market Watch with Alan Brugler

July 13, 2012

Not a Cloud in the Western Sky

 

The crop weather situation is mixed, with the WCB warmer and dryer than normal and above normal precipitation forecasted for the Ohio River Valley, Great Lakes and eastern Seaboard. The US model and the European model lean drier in the long term forecasts. Highs in the ECB for the next week should culminate in the mid 80s which will give the crop some moderate relief. Nighttime minimums will be mostly in the 60s with a few nightly lows over the next week in the 70s.  Grain futures this past week advanced significantly, then the USDA confirmed the yield numbers the market was already trading and sent the market into a sideways trading pattern, at least for the rest of the week.

 

The weather is also having an impact on livestock by driving grain prices higher and deteriorating pasture conditions. The Indiana FSA office approved 22 Indiana counties for emergency grazing on CRP acres because of the severe drought over much of the state. Cattle were down $2.00 and Feeder Cattle were down $7.53 for the week.  July Lean Hogs were up $1.00 while August Lean Hogs were down $2.90 for the week.  July corn futures went off the board 15 ½ cents lower today and were up 13 cents for the week.  Soybean meal was up $17.30 for the week. We are also seeing corn demand decline for ethanol along with export demand.  Mexico changed their corn tender for 120,000 MT of corn from "U.S. and optional origin" to "non-U.S." origin. A 550,000 MT purchase by Mexico announced in the weekly Export sales report was "optional origin". While the US has a big freight advantage to Mexico, cheaper South American corn would also work in there. Weekly ethanol production slowed last week by 36,000 barrels per day to only 821,000 bpd. That equates to the smallest weekly corn use since July 2010 for that industry. In other words we continue to see usage rationed by the current prices.

 

If no rain materializes over the weekend we could see grain prices move above this week’s consolidation pattern and move below the pattern if rains or forecast for rains develop.

 

 

Commodity

 

 

 

 

Weekly

Weekly

Month

06/22/12

06/28/12

07/06/12

07/13/12

Change

% Change

July

Corn

$5.91

$6.73

$7.43

$7.56

$0.13

1.68%

July

CBOT Wheat

$6.73

$7.39

$7.91

$8.42

$0.51

6.41%

July

KCBT Wheat

$6.86

$7.39

$7.90

$8.41

$0.52

6.52%

July

MGEX Wheat

$8.59

$8.64

$9.14

$9.35

$0.22

2.35%

July

Soybeans

$14.43

$15.13

$16.20

$16.42

$0.22

1.37%

July

Soybean Meal

$422.00

$436.00

$471.60

$488.90

$17.30

3.67%

July

Soybean Oil

$49.74

$52.21

$53.27

$53.57

$0.30

0.56%

Aug

Live Cattle

$116.90

$120.45

$119.20

$117.20

($2.00)

-1.68%

Aug

Feeder Cattle

$152.80

$151.45

$146.53

$139.00

($7.53)

-5.14%

July

Lean Hogs

$94.93

$96.63

$96.23

$97.23

$1.00

1.04%

July

Cotton

$74.17

$72.16

$70.78

$71.76

$0.98

1.38%

July

Oats

$3.29

$3.36

$3.52

$3.65

$0.14

3.91%

July

Rice

$14.47

$14.19

$14.77

$14.86

$0.09

0.64%

 

Corn was 13 cents higher for the week but had a wide range of $7.94 to $7.32 with much of that taking place Wednesday following the monthly USDA crop report. USDA surprised the market by lowering yields 20 bushels per acre from the June report. USDA has occasionally lowered yields on the July report but in the past never more than 3 to 4 BPA. The trade had already built that yield into the price so after the initial impact from the report corn sold off. The crop is deteriorating daily with weather forecasts showing not much change from above normal heat and below normal rainfall. Condition ratings are expected to decline on next week’s crop progress report.

 

Soybeans were up 22 cents for the week after being up $1.07 the prior week. Weekly soybean export sales were larger than expected for the reporting week ending July 5th with new crop sales above the last several years for this week. Chinese buying is still there. US export commitments (shipments plus open contracts) fully cover the USDA export estimate for the year. Outstanding new crop sales totaled 14.28 MMT as of July 5th which compares to 8.271 MMT a year ago. There are reports of soybean leaves turning yellow and curling under but August is historically the critical month for development. A South American analytical firm projects Brazil soybean production will outpace the U.S. in 2012/13. They are projecting U.S. soybean production at 80 MMT compared to this week’s WASDE of 83.01 MMT.  The Brugler500 index for soybean crop conditions dropped to 309 from 322. Ratings are now the lowest since 1988.

 

The three wheat markets finished the week 22 to 52 cents higher with the July contracts all expiring at noon today. The next contract month prices were at a premium to the expiring contracts of 6 cents (CBT), 10 cents (KC) and 14 cents (MGEX). Winter wheat harvest was 75% complete as of Sunday and should be wrapping up with little weather interruptions accept for the northern wheat areas. Weekly export sales for the week ending July 5th were 311,758 MT a marketing year low dipping from the previous week which is atypical for the previous four marketing years for that week. India published an export tender for 240,000 MT of wheat in an effort to move burgeoning stocks with grain storage at capacity.

 

Nearby cotton futures were up 240 points on the day and up 1.38% for the week. The USDA reduced Global cotton ending stocks to 72.39 million RB from 74.51 million RB on the June report. USDA also reduced U.S. cotton ending stocks buy by a mere 0.10 million RB. China remains the largest importer of Upland cotton at 5.2 million RB as of July 5th.  Total Upland exports were at 9.3 million RB and Pima sales at 0.552 million RB with USDA cotton projections at 11.6 million RB for 2011/12 with roughly 3 weeks and 3 days left in the marketing year. Cotton prices have moved into a sideways price range since the end of May.  

 

Cattle futures were down 1.68% this past week. Wholesale beef prices were under pressure all week ending at $183.94, down $8.71 from Friday to Friday for Choice beef. The Economic Research Service published May beef and veal exports at 207.6 million pounds compared to 234.8 million pounds a year ago. Prices were much lower a year ago however. USDA published their monthly world supply demand estimates this week and raised annual beef production by 90 million pounds. Feeder cattle were really under price pressure this week with high corn prices and lower cash auction prices dropping prices $7.53 for the week.

 

Lean Hog futures were $1.00 or 1.04% for the week on the July contract which will expire on Monday. The upcoming August spot contract is at a near $7.00 discount to the expiring July which will have an impact on the weekly chart unless the spread narrows on Monday. The Economic Research Service put May Pork exports at 448.2 million pounds, the highest export number since 2008 for the month of May. The monthly WASDE lowered pork production by 70 million pounds. The Index and futures are working towards each other with IA/MN direct average hog price at $91.86, down $4.32 this afternoon. The Carcass cutout has been steadily dropping since June 28th. The Carcass value was $89.49 this afternoon with the June 28th value at $96.15.

 

Market Watch:

The main USDA reports this coming week will fall on Friday, with Cold Storage and Cattle on Feed to be released at 2 pm CDT. There will of course be interest in the Crop Progress report on Monday afternoon at 3:00 pm. The expiration of the July Lean Hog contract is also Monday with the spread between the CME Lean Hog Index and futures expected to converge. Thursday will include the weekly USDA Export Sales report which should further demonstrate declining export price rationing. Financial reports include Housing Starts, CPI, Capacity Utilization and Industrial Production early in the week and Existing Home Sales and EIA Gas Storage on Thursday.

 

 

 

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

Hotter Than a Firecracker

Jul 06, 2012

Brugler

Market Watch with Alan Brugler

July 6, 2012

Hotter Than A Firecracker

 

Thousands of new high temperature records have been set across the US this week. While not as hot as a firecracker (up to 2000 deg Celsius in some of the big shells), the weather was plenty hot. Due to damage to the growing crop, the corn market was even hotter. Soybeans and wheat came along for the ride in their role as feed substitutes.

Corn rallied another 10.5% after the 13.8% gain of the prior week. Some were buying it due to the heat wave, some were buying it due to drought conditions. The 100 degree temps were not conducive to pollination, particularly in dry conditions. USDA showed 25% of the crop pollinating as of last Sunday, but it should be close to 45% this week. Foreign importers are definitely not buying at these prices. Weekly export sales were still poor at only 153,500 MT.  The Brugler500 index, computed from USDA’s crop condition ratings, fell to 327 from 349 the week prior. That is above 1988, but the lowest reading for this date since 1988. Ethanol production slowed as rising corn prices squeezed margins and forced some plants to take extended down time. Ethanol stocks also dropped to the lowest level of 2012, as gasoline use rose and thus the blender demand for ethanol.

Soybeans gained 7.07% this week, propelled by an 8.2% jump in July soybean meal. Weekly soybean export sales were larger than expected for the reporting week ending June 28, including a 1.3 MMT sale to "unknown destinations". Total sales were 1.76 MMT for the week. Chinese buying is still ongoing. They make up nearly 60% of the global export trade in soybeans, and need to buy more than 40 million bushels per week from all sources. US export commitments (shipments plus open contracts) are now larger than the USDA export estimate for the year. While it is difficult to hurt soybean yields in June, there are widespread complaints about poor stands and a lot of "cupping" of moisture stressed plants during the day. The Brugler500 index for soybean crop conditions dropped to 322 from 342. That was the lowest index reading for this week since 1988 (281).

 

Commodity

 

 

 

 

Weekly

Weekly

Month

06/15/12

06/22/12

06/28/12

07/06/12

Change

% Change

July

Corn

$5.80

$5.91

$6.73

$7.43

$0.71

10.52%

July

CBOT Wheat

$6.10

$6.73

$7.39

$7.91

$0.52

7.07%

July

KCBT Wheat

$6.30

$6.86

$7.39

$7.90

$0.51

6.91%

July

MGEX Wheat

$7.88

$8.59

$8.64

$9.14

$0.50

5.76%

July

Soybeans

$13.76

$14.43

$15.13

$16.20

$1.07

7.07%

July

Soybean Meal

$410.10

$422.00

$436.00

$471.60

$35.60

8.17%

July

Soybean Oil

$48.44

$49.74

$52.21

$53.27

$1.06

2.03%

Aug

Live Cattle

$116.65

$116.90

$120.45

$119.20

($1.25)

-1.04%

Aug

Feeder Cattle

$156.03

$152.80

$151.45

$146.53

($4.93)

-3.25%

July

Lean Hogs

$93.03

$94.93

$96.63

$96.23

($0.40)

-0.41%

July

Cotton

$79.98

$74.17

$72.16

$70.78

($1.38)

-1.91%

July

Oats

$3.08

$3.29

$3.36

$3.52

$0.16

4.61%

July

Rice

$13.92

$14.47

$14.19

$14.77

$0.58

4.05%

 

All three wheat markets posted nice gains for the week, led by Chicago at 7.07%. Winter wheat crop condition ratings are done for the year, with the Brugler500 Index at 346. That is most similar to 2005. USDA put June 1 ending stocks at 743 million bushels and USDA is expected to change their ending stocks figure for 2011/12 to this figure. A Bloomberg survey released on Friday shows the trade anticipating a 2 MMT cut in old crop wheat stocks on Wednesday, and a 3 MMT drop in new crop due to reduced global production.

Nearby cotton futures closed the week 1.9% lower after dropping 2.7% the previous week. Export Commitments YTD had been 117% of the USDA forecast for the year before the late June cancellations. They are now at 112% of the projection, with a month of shipping to do. There were 83,800 running bales of old crop upland cotton sold last week. Those need to be shipped before July 31 to be counted as old crop business in the balance sheets. Crop condition ratings dropped a little in the week ending July 1, due to heat and dryness.

Cattle futures fell a little over 1% for the week. Wholesale beef prices for the week were 1% lower in the choice boxes, and down 1.9% in the select. Estimated beef production for the week was 448.7 million pounds, down 1.6% from the equivalent week in 2011. YTD production is down 2.5% on a 4.5% drop in the number of cattle slaughtered. Limited cash cattle trade was reported Friday at $117 in KS, NE and TX on light volume. Dressed quotes were $186-188 in NE. Most of the key areas were still limited on Friday afternoon as high temps interfered with operations. Temps are supposed to moderate in cattle country this week. Weekly beef export sales rose another 8%, to 19,900 MT.

Lean Hog futures lost 40 cents per hundredweight for the week. Wholesale prices dropped a sharp 5.55% this week after falling 5.34% last week. Pork loin prices were down nearly 14% for the week. Estimated pork production this past week was down 12.3% from the prior week, typical for this holiday week. Production was still up 2.7% from the same week in 2011, however, and pork tonnage YTD is still 2% larger than at the same point a year ago. July futures are still at more than a $4 discount to the CME Index. The two need to converge by expiration on the 16th.

Market Watch: USDA will issue updated Crop Production and WASDE Supply/Demand estimates on Wednesday morning. These will incorporate the changes from the June 29 Acreage and Grain Stocks reports. USDA will also have to do something about their average yield estimates, although they will not have actual survey data until August. The Crop Condition ratings are expected to drop in the Monday afternoon report. There is also interest in the weekly Export Sales on Thursday morning. Friday the 13th will be the last trading day for July grain futures.

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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