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April 2013 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.

Spring Finally At Hand, Locally

Apr 26, 2013

 Brugler

Market Watch Alan Brugler

April 26, 2013

Spring Finally At Hand, Locally

 

The weather has turned warmer, with more "normal" and even some "above normal" readings. The US weather pattern has also turned a little drier, particularly in the western Corn Belt. The combination means that a few more planters are out of the shed, and a many more farmers are anxious for the soil dry down that will allow them to get into the field.       

 

Corn futures for the May contract lost 8 cents, or 1.23% on the week. Ethanol production rose to an average 853K bpd last week. This is up 21K from last week and above the 4-week average of 824.5K. Ethanol stocks increased by 85K barrels to 17.692 million barrels. Stocks remain well below a year ago when over 21 million barrels were in storage. Exports sales were strong at 335,900 MT. Private exporters also reported a 240,000 MT new crop sale to China along with a 300,000 MT sale to an unknown. The new marketing year begins September 1. Cold and wet weather still kept most of the planters out of the fields, with USDA showing only 4% of the crop in the 18 major states planted as of April 21.  The CFTC Disag report shows managed money cut their net long position by 40,149 contracts to be net long 12,239 contracts.  This is the least-long managed money position reported since April 27, 2010.

 

Soybeans ended the week 2 cents higher, after a choppy week of trading.  May futures lost 15 cents on Wednesday, and then rallied back 19 cents on Thursday. US export sales last week showed a net reduction of 206,300 MT for 2012/13 due to a Chinese cancellation, and sales of 628,480 MT for the 2013/14 marketing year.  US export commitments are now 99.15% of the revised USDA expectation for the year. There are still concerns about cancellations this summer if exporters are double bought and the South American beans they have purchased are finally delivered.  Projected Chinese imports for 12/13 were lowered 2 MMT to 61 MMT. There is some trade talk that the number might be lowered to 59 MMT eventually, based on slow 1Q imports and the avian flu (H7N9) virus control efforts likely limiting second quarter demand. The net position of managed money was near unchanged as of last Tuesday. They are currently net long 73,705 contracts, down 864 from the previous report.

 

Wheat futures lost 2.86% in Chicago, and 1.76% on the Minneapolis exchange, but KC wheat gained 1.34% this week. The Brugler500 index for Winter Wheat condition dropped from 298 to 293 on a 500 point scale. The HRW rating declined again on freeze damage. The SRW rating held steady. Some areas actually got too much rain, with reports of localized ponding in some wheat fields of Ohio.  Managed money accounts increased their net long position in KC wheat by 1,756 contracts, and decreased their net short position in Chicago wheat by 6,308 contracts; indicating a friendlier attitude for both classes.  

 

Cotton was down 128 points on the week, losing 1.53%.  Global cotton consumption is expected to increase by 4% in 2012/13.  Global stocks are expected to shrink 10% due in part to China holding 55% of the world supply.  Export sales continue to be the bright spot in the domestic cotton market, with a combined 266,700 RB reported for the week.  Overall commitments stand at 96% of the USDA estimate for the marketing year.  The five year average pace is 98% for this date.  The CFTC commitment of traders report showed managed money decreased their net long position in cotton by nearly 1%.  

 

 

 

 

 

Commodity

 

 

 

 

Weekly

Weekly

Month

04/05/13

04/12/13

04/19/13

04/26/13

Change

% Change

May

Corn

$6.29

$6.59

$6.52

$6.44

($0.08)

-1.23%

May

CBOT Wheat

$6.99

$7.15

$7.09

$6.89

($0.20)

-2.86%

May

KCBT Wheat

$7.26

$7.53

$7.46

$7.56

$0.10

1.34%

May

MGEX Wheat

$7.88

$8.08

$8.26

$8.11

($0.15)

-1.76%

May

Soybeans

$13.62

$14.14

$14.28

$14.31

$0.02

0.18%

May

Soybean Meal

$391.80

$400.30

$412.40

$417.90

$5.50

1.33%

May

Soybean Oil

$48.83

$49.30

$49.16

$49.66

$0.50

1.02%

Apr

Live Cattle

$126.03

$125.85

$126.35

$127.85

$1.50

1.19%

May

Feeder Cattle

$144.30

$140.93

$139.20

$141.80

$2.60

1.87%

June

Lean Hogs

$89.70

$89.90

$90.20

$92.53

$2.33

2.58%

May

Cotton

$86.65

$85.02

$83.48

$82.20

($1.28)

-1.53%

May

Oats

$3.60

$3.80

$3.92

$3.91

($0.01)

-0.32%

May

Rice

$15.50

$15.82

$15.23

$14.80

($0.43)

-2.82%

 

 

Cattle futures were up 1.19% for the week, gaining $1.50.  Boxed beef was also higher this week.  Choice gained $2.79 and Select was up $.80 from Friday to Friday.  This brought the spread to $8.46, which is $1.99 wider than it was last Friday. Cash cattle trade showed some slight improvement from last week with some cash cattle changing hands late Thursday with sales at $1.28 in Iowa on a live basis. Sales took place at $2.03 on a dressed basis which is slightly higher than reports last week of $2.02.  Texas also had sales at $1.28, which is up $2 from last week.  The weekly slaughter numbers this week were 10,000 head larger than last week, and the same period last year.  This week’s figure is 625,000 head including the Saturday estimate. Beef export sales for the week totaled 15,854 MT.

 

Hog futures were $2.33 higher this week, gaining 2.58%. The CFTC report, which runs Tues to Tues, shows managed money added to their net long position with an increase of 488 contracts.The pork carcass cutout gained $3.81 or 4.54% for the week.  The overall cutout was well supported with the Loins and Butts cuts both gaining more than 4%, and Pics were up 5.85% while the Hams cut gained 6.31%. The estimated weekly slaughter is 2.148 million head including Saturdays projected kill. Hog slaughter is now running 0.3% behind a year ago.  USDA reported weekly pork export sales of 12,184 MT which up from the prior week when they were put at 8,324 MT.

 

Market Watch

 

Grain futures will start the week reacting to the loss of "coverage" of May futures, as the May options expired on Friday. Some folks have "surprise" positions to be adjusted on Monday. The traders will be very interested in the weekly USDA Crop Progress report on Monday afternoon, expecting it to show corn and spring wheat planting progress that is still well behind the normal pace. Winter wheat ratings are also expected to be down again because of further freeze damage.  The USDA Export Inspections (Monday) and Export Sales (Thursday) will also be key gauges of disappearance. April live cattle futures will expire on Tuesday. May cattle options will expire on Friday. Not to be overlooked, the Fed will be meeting on Tuesday and Wednesday.

 

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.  Visit our web site at https://www.bruglermarketing.com or call 402-697-3623 for more information on our consulting and advisory services for farm family enterprises and agribusinesses.

Copyright 2013 Brugler Marketing & Management, LLC

A Cold and Wet Weather Picture

Apr 19, 2013

Brugler

Market Watch with Alan Brugler

April 19, 2013

A Cold and Wet Weather Picture

There is still drought talk around (central NE has seen less than 3" of moisture January 1), but most of the market has switched to concerns about planting delays because of heavy rains. The map below shows the 7 day accumulations, with totals of 4 to 5 inches in parts of IA, MO, IL, IN and MI. In most cases it will take a week to 10 days of warm and drier weather to get back into those fields. Flooding was expected on the Mississippi River over the weekend, interfering with barge movement. In many Corn Belt locations, soil temps are still too cold for corn seed to germinate. Not to be overlooked, there is also snow cover of as much as 20" in Minnesota and the Dakotas. The NWS 8-14 day forecast does show a somewhat warmer and drier pattern from April 27-May 3, particularly in the Western Corn Belt.

7 Day Rain Totals

Text Box: Special Note: Our Brugler Marketing iPad demonstration app is now available from the Apple store. We are calling the app AgMarket and you should be able to find it using keyword search under terms such as Brugler, AgMarket, charting, agriculture, commodities, etc.  Be sure to complete all parts of the registration page so that we match your app to your existing Brugler services or assist you in becoming a client. Your needed password/PIN will be emailed to you, so look for it after registering the app! It is needed to activate the app...... 

 

Weekly Overview

 

  Commodity         Weekly Weekly
Month 03/28/13 04/05/13 04/12/13 04/19/13 Change % Change
May Corn $6.95 $6.29 $6.59 $6.52 ($0.07) -1.10%
May CBOT Wheat $6.88 $6.99 $7.15 $7.09 ($0.05) -0.77%
May KCBT Wheat $7.27 $7.26 $7.53 $7.46 ($0.07) -0.86%
May MGEX Wheat $7.80 $7.88 $8.08 $8.26 $0.18 2.23%
May Soybeans $14.05 $13.62 $14.14 $14.28 $0.15 1.04%
May Soybean Meal $404.60 $391.80 $400.30 $412.40 $12.10 3.02%
May Soybean Oil $50.11 $48.83 $49.30 $49.16 ($0.14) -0.28%
Apr Live Cattle $128.90 $126.03 $125.85 $126.35 $0.50 0.40%
Apr Feeder Cattle $143.40 $142.53 $137.93 $134.03 ($3.90) -2.83%
June Lean Hogs $91.08 $89.70 $89.90 $90.20 $0.30 0.33%
May Cotton $88.46 $86.65 $85.02 $83.48 ($1.54) -1.81%
May Oats $3.96 $3.60 $3.80 $3.92 $0.12 3.16%
May Rice $15.38 $15.50 $15.82 $15.23 ($0.58) -3.70%

 

Corn futures for the May contract lost 7 cents per bushel this week after gaining 30 the previous week. Weekly US production of ethanol was 832K barrels/day. That was the second largest grind since January, but use outstripped production. EIA ethanol stocks declined by 281K barrels (ending @17.507 M barrels). There were no imports of ethanol last week for the second week in a row. Cold wet weather kept most of the planters out of the fields, with USDA showing 2% of the crop planted vs. the 7% average for this week and 16% last year.


Soybeans rallied another 1% this week, adding to a 3.8% advance the previous week. May futures were up 15 cents. Total export sales for last week totaled 566,800 MT. This brought the total export commitments to 99.7% of the USDA forecast for this marketing year vs. the 5-year average of 93%. Total soybean meal export commitments stand at 99% vs. the 5-year average of 80%. Bean oil commits are 80% vs. the 5-year average of 78%. There are still concerns about cancellations this summer if exporters are double bought and the South American beans they have purchased are finally delivered.  Projected Chinese imports for 12/13 were lowered 2 MMT to 61 MMT in the USDA report, and are now expected to decline further due to H7N9 flu issues and resulting losses of live chicken demand.

Wheat futures lost 0.77% in Chicago and 0.86% in KC this week. MPLS was 18 cents or 2.23% because of the planting delays for spring wheat. The Brugler500 index for Winter Wheat condition declined to 298 from 299 the previous week. The HRW rating declined again this week because of freeze damage. The SRW rating improved again this past week, thanks to rainfall filling in needy areas. Some areas actually got too much rain, with reports of localized ponding in some wheat fields in Ohio. The USDA reported 1.674 MMT in weekly export sales of both new crop and old crop. HRW sales were 372,575 MT. SRW sales were 991,226 MT, with most of that new crop and including a big sale to China. HRS totaled 164,529 MT. Total wheat export commitments stand at 94% of the USDA’s projected amount vs. the 5-year average of 101%.

Cotton was down 1.8% this week. Cotton export sales continue to move right along, with the USDA Export Sales report showing net weekly sales of 247,200 RB for Upland and 15,000 of Pima. Total export commitments stand at 94% of the USDA projection vs. the 5-year average of 97%. Planting is just getting underway.

Cattle futures were 50 cents higher this week.  Boxed beef was mixed for the week; Choice boxes gained 58 cents per cwt, while Select fell back 51 cents. Cash cattle trade was mostly $1-2 lower than last week, with Nebraska showing $200-202 on Friday and Colorado mostly $126-126.50. The weekly slaughter was 1.5% larger than last week and 2.7% larger than a year ago. A glance at the COF report shows the reason, with cattle backed up from March into April. Beef production for the year to date is still down 1.5%. Beef export sales for the week totaled 16,809 MT, a > 60% improvement from last week. The Friday evening USDA Cattle on Feed report showed much larger placement activity in March than had been expected by the trade. Placements were 105.97% of year ago. March marketings were also lighter than expected at 92.3% of last year. The combination left April 1 On Feed numbers at 95.0% of year ago.

Hog futures finished Friday with a weekly gain of 30 cents per cwt in the June futures. The pork carcass cutout gained 3.34% for the week, or $2.71/cwt. Ham prices rose 8.1% in a week, but all the cuts were higher. The estimated weekly slaughter was 2.139 million head, up 2.7% from the same week in 2012.  Hog slaughter YTD (Year to Date) is now running 0.5% behind a year ago. Pork production YTD is down 1.1% because carcass weights continue to run 2 pounds lighter than last year at this time. USDA reported weekly pork export sales of 8,324 MT, down from 13,278 MT the previous week and 48,355 MT three weeks ago.

Market Watch

Cattle traders will start the week reacting to the fundamentally bearish USDA Cattle on Feed report from Friday. Both cattle and hog producers will need to at least glance at the Cold Storage report numbers on Monday afternoon, due to market expectations that the pork numbers in particular could be at near record levels. Grain folks will be interested in the export numbers from the Inspections report on Monday and the Weekly Sales report on Thursday. They will also look hard at the USDA Crop Progress report on Monday evening. That report is expected to show ongoing delays in corn and spring wheat planting vs. the average pace.  April feeder cattle futures expire on Thursday.  The May 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.  Visit our web site at https://www.bruglermarketing.com or call 402-697-3623 for more information on our consulting and advisory services for farm family enterprises and agribusinesses.

Copyright 2013 Brugler Marketing & Management, LLC

The No Theme Theme

Apr 12, 2013

 

        Brugler

Market Watch with Alan Brugler

April 12, 2013

The No Theme Theme

 

Regular readers of this column know that we usually start out with an introductory theme for the week, and then follow with our summaries of the features of the individual commodity markets. This week, our theme is that there really wasn’t a theme. Money was moving in a lot of different directions. Gold was collapsing, down more than $60 per ounce on Friday alone. That would be a dis-inflationary or strong dollar theme. Retail sales in March were poor, which suggests a slowdown except for the improvement in home sales, and the lousy weather that might have meant folks were just staying home. The dollar was weaker, typically inflating commodity prices in dollar terms. Crude oil was lower, however. Fund traders were exiting cattle futures despite solid cash cattle trade several dollars above the futures market. Corn and soybeans rallied despite bearish USDA world stocks numbers.

 

Corn futures for the May contract gained 30 cents per bushel this week, up 4.81%.  Ethanol production jumped 40K barrels to 847K barrels/day. This is the highest daily average production since July 2012.  The EIA reported ethanol stocks increased by 307K barrels to 17.788 million barrels, which is still 3.312 million barrels smaller than a year ago.  Cold wet weather kept most of the planters out of the fields, with much of the WCB and Southeast catching more than an inch of rainfall.  May corn futures are getting an extra boost on fears of a delivery squeeze due to limited old crop stocks in deliverable position, and the strong cash corn basis.  The USDA report on Wednesday was supportive, as USDA found that most of the "extra" bushels in the March 28 Grain Stocks report will be used prior to the end of the marketing year on August 31.

 

Soybeans rallied 3.8% this week. May futures were up 52 cents. November futures did not participate to the same degree, gaining less than 4 cents on the week.  US export sales last week were neutral with 383,700 MT in sales for the week.  In Wednesday’s WASDE report, the USDA left projected 2012/13 ending stocks UNCH at 125 million bushels. Reduced residual use was offset by larger crush expectations and a modest 5 million bushel bump in expected US exports. US export commitments are now 99% of the revised expectation for the year. There are still concerns about cancellations this summer if exporters are double bought and the South American beans they have purchased are finally delivered.  USDA made no changes in projected Argentine or Brazilian soybean production, but did see them keeping more of those beans at home. Projected Chinese imports for 12/13 were lowered 2 MMT to 61 MMT.

 

Wheat futures gained 2.22% in Chicago, 2.54% on the Minneapolis exchange, and KC wheat gained 3.65% this week. The Brugler500 index for Winter Wheat condition started out the year at 299 and did not change this week. That masked changes in the underlying wheat classes. The HRW rating declined again, with TX, OK, NE and SD ratings all hurt by freezing weather. The SRW rating improved this past week, thanks to warmer weather and some rainfall filling in needy areas. Some areas actually got too much rain, with reports of localized ponding in some wheat fields in Ohio. USDA cut estimated feed use for 2012/13 by 15 million bushels, in order to match up with the March 1 stocks number. Ending stocks were revised upward to 731 million bushels. World stocks estimates were hiked to 182.3 MMT, a 4.07 MMT jump from last month.

 

Cotton was down 163 points on the week, after rallying to close today’s session 212 points off the low of the day.  Global cotton consumption is expected to increase by 4% in 2012/13.  Global stocks are expected to shrink 10% due in part to China holding 55% of the world supply.  The shining star in cotton’s book continues to be strong export sales, with a combined 324,400 RB reported for the week.  Overall commitments stand at 93% of the USDA estimate for the marketing year.  The five year average pace is 96% for this date.  USDA left US ending stocks UNCH at 4.2 million bales. World ending stocks were revised to 82.45MMT from 81.74MMT last month in the Wednesday WASDE report.

 

  Commodity         Weekly Weekly
Month 03/22/13 03/28/13 04/05/13 04/12/13 Change % Change
May Corn $7.26 $6.95 $6.29 $6.59 $0.30 4.81%
May CBOT Wheat $7.30 $6.88 $6.99 $7.15 $0.15 2.22%
May KCBT Wheat $7.62 $7.27 $7.26 $7.53 $0.27 3.65%
May MGEX Wheat $8.07 $7.80 $7.88 $8.08 $0.20 2.54%
May Soybeans $14.41 $14.05 $13.62 $14.14 $0.52 3.80%
May Soybean Meal $419.30 $404.60 $391.80 $400.30 $8.50 2.17%
May Soybean Oil $50.43 $50.11 $48.83 $49.30 $0.47 0.96%
Apr Live Cattle $126.20 $128.90 $126.03 $125.85 ($0.17) -0.14%
Apr Feeder Cattle $138.05 $143.40 $142.53 $137.93 ($4.60) -3.23%
Apr Lean Hogs $78.05 $80.60 $80.03 $82.23 $2.20 2.75%
May Cotton $87.29 $88.46 $86.65 $85.02 ($1.63) -1.88%
May Oats $3.96 $3.96 $3.60 $3.80 $0.21 5.70%
May Rice $14.90 $15.38 $15.50 $15.82 $0.32 2.07%

 


 

Cattle futures were down 0.14% for the week.  Boxed beef was also lower for the week; Choice lost $1.80 and Select was down $2.87.  This brought the spread to $5.38, up $1.07 on the week. Cash cattle trade showed some improvement from last week with sales taking place in Nebraska, Kansas, and Texas at $1.28 while going for $202 on a dressed basis. The weekly slaughter numbers continue to run behind last year’s pace, with the expected slaughter for this week including Saturday estimates at 606,000 head. The year-to-date slaughter is 2.7% behind the pace set last year. Beef export sales for the week totaled 10,196 MT.

 

Hog futures finished Friday with the April contract up 2.75% as it headed into expiration. The CFTC report, which runs Tues to Tues, shows managed money added to their net short position with an increase of 2,967 contracts. The pork carcass cutout gained 0.59 or $0.73% for the week, with a 4.76% gain in Pics and 4.45% gain in hams supporting the overall cutout. The estimated weekly slaughter is 2.089 million head including Saturdays projected kill. Hog slaughter is now running 0.7% behind a year ago. The CME lean hogs index finished with a $0.36 loss to settle at $81.39. USDA reported weekly pork export sales of 13,278 MT which was down sharply from the prior week when they were put at 48,355 MT.

 

Market Watch

 

The grain trade will begin the week looking at the monthly NOPA crush report on Monday morning. NOPA is expected to show March crush was larger than in February, but below the level from March 2012. Traders are also keenly interested in the USDA winter wheat condition ratings to be released on Monday evening. The crop undoubtedly took a hit from the winter storms, but the question is how much will appear in this week’s report. USDA is also expected to show corn planting progress for the first time this year. That 5 year average pace for this week is 4% complete.  Weekly export inspections on Monday and Export Sales on Thursday are also key fundamental news inputs. The main USDA inputs for livestock producers will occur on Friday afternoon, when USDA is scheduled to release the monthly Cattle on Feed report and the monthly Milk Production numbers.

 

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.  Visit our web site at https://www.bruglermarketing.com or call 402-697-3623 for more information on our consulting and advisory services for farm family enterprises and agribusinesses.

Copyright 2013 Brugler Marketing & Management, LLC

Bird Flu II

Apr 05, 2013

 Brugler

Market Watch with Alan Brugler

April 5, 2013

Bird Flu II

 

As if we needed something else to be bearish about grains after the (much) larger than expected grain stocks report, an outbreak of H7N9 (commonly call the bird flu) in China is causing quite a stir in the news.  So far six people have died from it, but all picked up the flu from animals; no person-to-person transmissions reported at this point.  Speculators were treating it like a real reason to be bearish soybeans and they kept the pressure on through the end of the week.  Media reports citing 20,000 birds being "destroyed" and thousands of dead pigs found floating in the Huangpu River, created some suspicion about future feed demand as well as some unpleasant imagery in the news and on the charts.  The effect of this outbreak is already overblown, and the overall impact on Chinese demand for soybeans and soy products will be miniscule, but the hype and public confusion on the subject does affect the market in the short term. 

 

A bigger issue for the market this week was that both the index funds, and all the new spec longs (from before the report) are all trying to get out of their May contracts at the same time.  It creates an opportunity for the livestock producers to buy feed at a discount before everybody realizes that it got too cheap, and prices rally back toward where they came from.  Grain producers win too (indirectly) because the price break keeps their main customers in business, and keeps them much healthier than if prices had gone the other way, which creates longer term support to grain prices instead of demand destruction.  Now for a recap of the price destruction we witnessed this week… 

 

Corn futures for the May contract lost 66 cents for the week, and that does NOT include the 40 cents it lost with the limit down move prior to the close last Thursday.  Ouch!  The damage to the corn chart this week was severe, but the hard break in prices will stimulate more demand for corn that is still "hard to find" and make for another Summer of tight stocks and strong basis. Weekly corn exports were the most reported since February 14th, and reflected export activity prior to the reports, so you can be looking for improvement in the weeks ahead.  Ethanol production was reported for the previous week as slightly higher, but stocks also saw a slight increase and imports were higher too.  Watch for an improvement in production next week as the $1 break in prices should make for a noticeable increase.  Soil temperatures in most of the Corn Belt are still too cold to support good germination, but the typical planting-delay rally for new crop corn has yet to begin.       

 

Soybeans broke a total of 43 cents between last Thursday’s close and the last trade today, just over a 3% hit.  The May contract is off more than a dollar from the pre-report high last week, helped lower by the H7N9 fears in China and more long liquidation as the market participants can’t find a reason to get long again yet.  Soybean meal was also down over 3%, losing $12.80 in the May contract.  Soybean oil took back nearly 1/3 of its losses for the week though, ending the week down $1.28 after being down as much as $1.86.  Soybean export sales reported on Thursday morning were substantial at 747,789MT, but the trade ignored it.  The post-report break in prices should make US exports more favorable this week than they were last week.  The total amount of soybean export commitments stands at 99% of the current USDA estimate for the entire year; a number we expect to increase when the April WASDE report is released next Wednesday.     

 

Wheat futures lost a penny in Kansas City wheat, but gained 7 cents in Minneapolis wheat, and 11 cents in Chicago wheat.  Dry soil moisture profiles, and a lack of precipitation in the forecast, combined with low crop condition ratings to support the wheat market despite the larger stocks reported at the end of last week.  The Brugler500 index for Winter Wheat condition started out the year at 299.  This is the same rating the 2011 crop started with, and is slightly better than our number for the same week in 2006, and 14 points better than in 2002.  The index rating for SRW states was in the middle of the range for this week over the last five years, but the rating for HRW states came in lower this week than the same week in any of the previous 10 years.  Export sales were below expectations at 315,984 MT, but that figure reflects export activity prior to the price break during last Thursday’s sell off.  Total wheat export commitments for the marketing year that ends May 31st are at 91% of the USDA’s total estimate for the year, compared to the five year average for this date of 99% so they have a some catching up to do unless the USDA lowers its wheat export estimate on Wednesday.                 

 

Cotton was down more than 2% this week, despite the USDA’s confirmation late last week that intentions were still only to plant 10 million acres vs. 12.3 million last year. The cotton market fell victim to a weaker tone in the outside markets with crude oil settling at a two week low and the Dow down due to poor job numbers.  The shining star in cotton’s book continues to be strong export sales, with a combined 207,607 RB reported for the week.  Overall commitments stand at 93% of the USDA estimate for the marketing year.  The five year average pace is 94% for this date.  The comfortable Global supply still weighs on the market, but Chinese buying is expected to continue.  CFTC data showed managed money was content with their long positions in cotton as traders added 167 long positions. 

 

  Commodity         Weekly Weekly
Month 03/15/13 03/22/13 03/28/13 04/05/13 Change % Change
May Corn $7.17 $7.26 $6.95 $6.29 ($0.66) -9.53%
May CBOT Wheat $7.23 $7.30 $6.88 $6.99 $0.11 1.64%
May KCBT Wheat $7.52 $7.62 $7.27 $7.26 ($0.01) -0.14%
May MGEX Wheat $7.96 $8.07 $7.80 $7.88 $0.07 0.93%
May Soybeans $14.26 $14.41 $14.05 $13.62 ($0.43) -3.06%
May Soybean Meal $418.80 $419.30 $404.60 $391.80 ($12.80) -3.16%
May Soybean Oil $49.91 $50.43 $50.11 $48.83 ($1.28) -2.55%
Apr Live Cattle $125.78 $126.20 $128.90 $126.03 ($2.88) -2.23%
Apr Feeder Cattle $139.10 $138.05 $143.40 $142.53 ($0.88) -0.61%
Apr Lean Hogs $79.68 $78.05 $80.60 $80.03 ($0.58) -0.71%
May Cotton $92.57 $87.29 $88.46 $86.65 ($1.81) -2.05%
May Oats $4.02 $3.96 $3.96 $3.60 ($0.36) -9.10%
May Rice $14.68 $14.90 $15.38 $15.50 $0.12 0.75%

 

Cattle futures struggled on Friday, with the trade still unable to piece together a sustainable rally. For the week, the April contract lost 2.23%. Feedlot owners received some relief with the sharp sell-off in the corn trade, but the April contract still closed with a -$0.88 loss on the week. Boxed beef finished with a $2.27 or 1.2% gain on the week while Select was down $1.37 or -0.7%. This pushed the spread between the two to its highest level since February 13th. Cash cattle trade showed some improvement from last week with sales taking place in Nebraska at $1.29 while going for $204-205 on a dressed basis. The weekly slaughter numbers continue to run behind last year’s pace, with the expected slaughter for this week including Saturday estimates at 593,000 head. The year-to-date slaughter is 3.2% behind the pace set last year. Beef export sales for the week totaled 10,508 MT.

Hog futures finished Friday with the May contract having its largest daily loss of the year which pushed it to its lowest level since June. The weaker than expected job data did not help support hog futures.  April lean hogs finished with a weekly loss of -$0.58 or 0.71%. The CFTC report, which runs Tues to Tues, shows managed money added to their short position with an increase of 1,823 contract. The pork carcass cutout lost -$0.26 or $0.34% for the week, with a 7% loss in loins partially offset by a 4.66% in butts. The weekly slaughter including Saturday is an estimated 2.088 million head including Saturdays projected kill. Hog slaughter is now running 0.9% behind a year ago. The CME lean hogs index finished with a $1.02 gain to settle at $78.01. Pork exports were reported by the USDA on a weekly basis for the first time, with 48,355 MT reported.

 

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.  Visit our web site at https://www.bruglermarketing.com or call 402-697-3623 for more information on our consulting and advisory services for farm family enterprises and agribusinesses.

Copyright 2013 Brugler Marketing & Management, LLC

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