Aug 22, 2014
Home| Tools| Events| Blogs| Discussions| Sign UpLogin


Market Watch

RSS By: Alan Brugler, AgWeb.com

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

New Year, Old Story

Jan 04, 2013

  Brugler

Market Watch with Alan Brugler

January 4, 2013

 

New Year, Old Story

 

The calendar may say that we began a new year on Tuesday, but thus far 2013 has looked a lot like the tail end of 2012. Fund traders have been exiting commodity positions because of investors shifting money to other asset classes or because of putrid export sales achievements or just because the 2012 drought is over and any 2013 edition is still hypothetical under January snow cover.

Corn futures lost 1.98% this week after being down more than 2% the prior week. Weekly ethanol production fell back from the previous week, to only 807,000 barrels per day. Ethanol stocks dropped to 20.2 million barrels. USDA put the net weekly export sales for this week at 49,100 MT, basically only 1 shipload. There was a cancellation of 86,900 MT by "unknown destinations". A Memphis firm projected final production at 10.8 billion bushels on Friday, using a 123.3 bpa yield. The trade is estimating the Dec 1st US corn stocks to be between 8.050 billion bushels and 8.30 billion bushels.

The soy complex was down 2.46% this week. Export sales and shipments are slowing as we get closer to South American harvest supplies. China has also been cancelling some prior purchases, reducing the net sales numbers. Weekly export sales estimates ran 200-400,000 MT because of the holidays. USDA put the actual number at a larger than expected 496,300 MT, including 61,400 MT of new crop. However, the ag attaché also indicated that the Brazilian crop might exceed 83 MMT and Argentina reported more rapid planting progress. A stronger US dollar didn’t help US export prospects in general.

KC wheat fell by 2.39%, with CBOT wheat with even bigger losses of 4.04%. The ongoing drought in the central US is a threat to US production in 2013, but also on the other side of unknown winter snowfalls. It is supportive but not definitive.  State crop reports from KS and OK both showed further deterioration in crop conditions. The USDA Export Sales were expected to be between 250-550,000 MT. For the week ending December 27 (which included the Christmas holiday period) USDA said that US sales netted 402,500 MT, about as expected. Egypt is making noise about not needing further imports, but low prices cure low prices by stimulating consumption. Argentina estimated the crop has been 79 percent harvested, down from the 93 percent that was completed at this time a year ago. Weather conditions have dried out with rain not expected to return until next week.

 

Commodity

 

 

 

 

Weekly

Weekly

Month

12/14/12

12/21/12

12/28/12

01/04/13

Change

% Change

Mar

Corn

$7.31

$7.02

$6.94

$6.80

($0.14)

-1.98%

Mar

CBOT Wheat

$8.14

$7.92

$7.79

$7.47

($0.32)

-4.04%

Mar

KCBT Wheat

$8.64

$8.42

$8.26

$8.06

($0.20)

-2.39%

Mar

MGEX Wheat

$8.85

$8.82

$8.68

$8.43

($0.25)

-2.91%

Jan

Soybeans

$14.96

$14.31

$14.24

$13.89

($0.35)

-2.46%

Jan

Soybean Meal

$460.10

$433.80

$427.70

$398.20

($29.50)

-6.90%

Jan

Soybean Oil

$49.63

$48.71

$48.94

$49.42

$0.48

0.98%

Feb

Live Cattle

$132.60

$133.58

$133.58

$132.95

($0.63)

-0.47%

Jan

Feeder Cattle

$153.08

$152.15

$152.03

$153.18

$1.15

0.76%

Feb

Lean Hogs

$85.40

$86.98

$86.38

$86.23

($0.15)

-0.17%

Mar

Cotton

$75.13

$76.22

$74.66

$74.91

$0.25

0.33%

Mar

Oats

$3.90

$3.65

$3.49

$3.33

($0.16)

-4.66%

Jan

Rice

$15.42

$15.21

$14.96

$15.03

$0.08

0.50%

 

 Cotton prices were up 0.33% this past week. Weekly export sales were softer than the week before at 183,800 running bales. China is active in the export market, despite holding major stockpiles of domestic production and imported Indian cotton. They bought 51,500 RB last week. They did indicate that they might start to sell cotton out of those reserves in order to cool domestic prices. US cotton acreage is expected to decline in 2013/14 due to high prices for competing field crops. That is also supportive for deferred futures.

 

Cattle futures were down 0.47% for the week.  Weekly beef export sales slowed to only 9,700 MT for combined 2012 (4 days) and 2013 business. They had been more than double that the previous week. Weekly estimated slaughter was 519,000 head including Saturday. That was up 40,000 head from Christmas week, but still 42,000 head smaller than the same week a year ago. Estimated carcass weight this week was 18 pounds larger than the actual number from last year. Wholesale prices were stronger this week. Choice boxes were up 0.4% and Select was up 1.10% for the week on a Friday/Friday basis. Weekly beef production was 5.3% smaller than the same week in 2011, and total YTD production in 2013 has still been 20.3% smaller thus far. Cattle trade on Friday afternoon was $205 on a dressed basis in Nebraska, about $2-3 higher than the previous week. Cash cattle trade on a live basis were at a standstill this week but were trading at $127 in Nebraska and $127.50 in Colorado last week.

 

Hogs were down 0.17% this week. Estimated weekly slaughter is 1.975 million head, down 89,000 from the same week in 2011. Weekly pork production was up 12.3% from the previous week, but down 5.7% from the same week a year ago. Estimated carcass weights are down 3# from last year, having risen less rapidly than usual out of the fall low. The pork carcass cutout rose 2.63% from last week. Strength in pics and hams were countered by weakness in butts.

 

Market Watch:

 

This week will be the BIG ONE. Not the Mayan type, or even an earthquake as far as we know. USDA will likely cause some shaking, however, but shedding some light in some dark corners of the grain (and cotton) supply/demand picture. On Friday morning at 11 am CST, they will issue the Final Crop Production estimates for grains, the Quarterly Grain Stocks for December 1, Winter Wheat Acreage, and the monthly WASDE supply/demand estimates which are revised based on those other numbers. There have been 5 limit moves in corn out of the past 6 January Grain Stocks reports, because there are so many moving parts. Somebody is sure to be surprised this time as well, with a range of estimates of nearly 500 million bushels. The rest of the week should be fairly routine, with USDA Export Inspections on Monday and weekly Export Sales on Thursday morning. Livestock folks have to deal with the feed cost elements of the above reports.

 

 

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 2013 Brugler Marketing & Management, LLC

 

Log In or Sign Up to comment

COMMENTS

No comments have been posted, be the first one to comment.
Legacy Newsletter
 

Follow Us

Facebook Twitter You Tube
 

Hot Links & Cool Tools

    •  
    •  
    •  
    •  
    •  
    •  
    •  

facebook twitter youtube View More>>
 
 
 
The Home Page of Agriculture
© 2014 Farm Journal, Inc. All Rights Reserved|Web site design and development by AmericanEagle.com|Site Map|Privacy Policy|Terms & Conditions