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October 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.

Waiting for Godot

Oct 25, 2013

 Brugler

Market Watch with Alan Brugler

October 25, 2013

Waiting for Godot

 

Samuel Beckett’s absurdist play titled Waiting for Godot is about two characters waiting endlessly for a character named Godot to arrive on a train. The grain markets also appear to be waiting endlessly for USDA.  Volatility has declined and prices have been mostly range bound for the past month, i.e. since the government outage. It looks like we are waiting for current data on market conditions before making any major price move.  Some crop condition and cash market data was just never collected and thus lost. Numerous other series were held by those required to report, but the governmental agencies need to process them sequentially due to software restrictions. Here is a partial list of items that won’t be current until either October 31 or November 8: US crop acreage, national average yield, weekly export sales, and Commitment of Traders spec fund positions. Livestock traders will get caught up on October 31, with the release of the monthly Cattle on Feed, Cold Storage and Livestock slaughter reports. The grain markets may wait for November 8, but pre-report positioning could move them early. After all, Godot never arrived at the station!

December corn futures were down 0.34% this week. Export inspections YTD are now 148 million bushels, comfortably ahead of the 128 million shipped by this date in 2012. That data is through October 17. The weekly Export Sales report through only October 3, showed large net weekly sales of 1.3 MMT.  USDA will release an updated Crop Progress report on Monday, with the trade expecting harvest to be about 45% completed. Crop condition ratings are improving as the combine yield monitors revise opinions of what good corn looks like.

November soybean futures held on for a 9 cent (+0.7%) gain this week. Export inspections on Monday jumped to 59.3 million bushels, rising in typical seasonal fashion after a slow start. Cumulative shipments are 72 million behind year ago as of October 17. Weekly export sales totaled 947,800 MT in the week ending October 3 (the most recent report). Sales continue to show up regularly in the USDA daily system for sales larger than 100,000 MT.  On Friday USDA reported a sale of 120,000 MT of Soybeans to China. Soybean harvest was 63% done as of October 20,  and is expected to be 78-80% completed in Monday’s crop report.

Wheat futures were lower in all three markets this week. Chicago gained the most ground last week, and was the biggest loser this week at 2.13%. MPLS was down 2% and KC off 1.3%.  Cumulative export shipments are now over 572 million bushels. Last year they were only at 393 million bushels. The Argentine government had indicated that its crop might only be 8.8 MMT, but retracted that estimate and indicated it was based on incomplete numbers. The BAX estimate is still above 10 MMT. India is cutting prices in an effort to become more competitive in the export market and remove some excess supply from domestic inventory.  

Cotton futures plunged more than 5% this past week. Technical selling was a big part of the decline, breaking out of a bear flag to the downside and taking out the September low. That had a lot of previous bulls heading for the exit. Global ending stocks are still projected to be record large, and rumors continue about a change in Chinese inventory policies that could impair US exports. US harvest activity is lagging the average pace at 21% complete. The average for this date would be 34%.

 

 

Commodity

 

 

 

 

Weekly

Weekly

Month

10/04/13

10/11/13

10/18/13

10/25/13

Change

% Change

Dec

Corn

$4.43

$4.33

$4.42

$4.40

($0.01)

-0.34%

Dec

CBOT Wheat

$6.87

$6.92

$7.06

$6.91

($0.15)

-2.13%

Dec

KCBT Wheat

$7.503

$7.603

$7.688

$7.590

($0.10)

-1.27%

Dec

MGEX Wheat

$7.46

$7.55

$7.60

$7.45

($0.15)

-2.01%

Nov

Soybeans

$12.95

$12.67

$12.91

$13.00

$0.09

0.68%

Dec

Soybean Meal

$418.40

$403.40

$410.10

$423.50

$13.40

3.27%

Dec

Soybean Oil

$40.24

$40.28

$41.68

$40.73

($0.95)

-2.28%

Oct

Live Cattle

$128.05

$128.80

$129.88

$132.58

$2.70

2.08%

Oct

Feeder Cattle

$164.45

$167.48

$166.08

$165.55

($0.53)

-0.32%

Dec

Lean Hogs

$87.63

$86.50

$87.95

$90.43

$2.47

2.81%

Dec

Cotton

$86.94

$83.37

$83.11

$78.91

($4.20)

-5.05%

Dec

Oats

$3.18

$3.17

$3.36

$3.33

($0.02)

-0.74%

Nov

Rice

$14.87

$15.12

$15.29

$15.54

$0.25

1.64%

 

Cattle futures rose $2.70 this week, a 2.1% gain. Cash cattle traded at $133 in Kansas and up to $206 in the north, up $2 from last week. Beef production YTD is down 0.9% from 2012. Production this week was 3.6% smaller than the same week in 2012.  Our calculations show that ready numbers should be declining into December, based on prior Cattle on Feed placement data.  Weekly slaughter was 618,000 head vs. 646,000 head a year ago. USDA announced that the monthly Cattle on Feed, Livestock Slaughter and Cold Storage reports would all be released on October 31. Wholesale beef prices were up 2.5% on a Thr/Thr basis in the Choice, and up 2.2% in the Select.

Hog futures were up 2.8% this week. Pork production YTD is down 1.3% from year ago. Production this week was 3.7% smaller than the same week in 2012, with slaughter down 4.5%. Thus, you might conclude that average carcass weights were a little higher. USDA estimates them up 2 pounds vs. year ago. The pork carcass cutout value was up only 8 cents for the week. Ham prices were the big gainer due to seasonal demand, but slippage in the ribs and bellies limited the overall increase in hog value.

Market Watch

This is the end of October, which means Halloween. There won’t be a market holiday, but there may be a few folks out for tricks and treats. End of month asset allocation adjustments can also produce some scary moves. Selling winners would seem to target cattle and hogs and wheat, while buying losers might make cotton and corn more attractive to the funds. USDA will be up to current date for the Export Inspections and Crop Progress reports on Monday. The Fed Open Market Committee will be meeting Tuesday and Wednesday, but they are expected to keep handing out the QE3 treats because of fall out effects from the government shutdown. Analysts will get a whole bag of candy on Thursday, with USDA issuing Cattle on Feed, Livestock Slaughter, Cold Storage and weekly Export Sales reports.  Thursday will also be first notice day for Nov soybean and rice futures deliveries. Thursday will also mark the expiration of October cattle and feeder cattle futures contracts. November cattle futures options expire on Friday.

Visit our Brugler web site at http://www.bruglermarketing.com, find our iPad app "AgMarket" in the app store, or call 402-697-3623 for more information on our consulting and advisory services for farm family enterprises and agribusinesses.

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.  

Copyright 2013 Brugler Marketing & Management, LLC

A Few Drips of Data

Oct 18, 2013

 Brugler

Market Watch with Alan Brugler

October 18, 2013

A Few Drips of Data

 

They may not have fixed the budget deficit or straightened out Obamacare, but Congress did manage to pass legislation to fund the government for a few months. That got USDA, EIA, CFTC and Commerce employees back to work generating the data we rely upon to make sure buyers and sellers are both equally informed. A few drips of daily cash market data came out of the government tap on Thursday and Friday, along with weekly export sales for the week ending September 26 (originally scheduled for release on October 3). EIA was only out for a week, and will issue a catch up weekly ethanol production report on Monday. Data sets will be ragged and prone to errors for a while, however, particularly from the export sector with its mix of daily and weekly reporting. Some missed numbers won’t be reported in their usual daily or weekly format but only in the aggregate. The data drips will turn into a flood as we round the corner into November.  Expect volatility.

December corn futures were up 1.9% this week. Private analyst Informa projected a drop in 2014 corn plantings to 91.7 million acres. That would imply about 83 million harvested and a potential 13.3 billion bushel crop at trendline yield according to our calculations. Export inspections YTD are now 115.4 million bushel, close to the 117.3 million a year ago. That’s not saying much, given the multi-decade low in shipments last year. Harvest is generally thought to be 30-40% completed, with a bias toward a USDA hike in projected national average yield. USDA will release an updated Crop Progress report on Monday.

November soybean futures were up 24 cents this past week, almost erasing the 28 cents per bushel lost the prior week. Export inspections on Monday jumped to over 47 million bushels. Cumulative shipments are 66 million behind year ago based on updated USDA data. Crush has been constrained by the slow pace of harvest, and there has been strong export demand and domestic feeder demand for soybean meal.  NOPA crush was in fact slightly larger than expected at 108 million bushels. Soy oil stocks were smaller than expected due to active biodiesel production.  Weekly export sales totaled 903,700 MT of 2013/14 and 2014/15 sales in the week ending September 26. USDA did announce 222,000 MT of soybeans sold to China under the daily reporting system, with another 140,000 MT sold to "unknown".  The Argentine ag minister expects 2013/14 soybean plantings there to be up only 600,000 HA from last year.

 

Wheat futures were higher in all three markets. Chicago gained the most ground, up 1.95% due to continued strong export buying interest and the small 2013 production. Cumulative export shipments are now over 550 million bushels. Last year they were only at 377 million bushels. Japan has been a steady buyer of US wheat, along with Brazil. Argentina indicated that its crop might only be 8.8 MMT due to a host of weather problems afflicting the crop.

Cotton futures were down 0.31%. On Friday, USDA issued the weekly export sales report for the week ending September 26. It showed a slow 64,300 MT of upland cotton sold that week, with much stronger Pima sales of 53,000 MT. USDA put the AWP at 68.61 cents per pound. The Cotlook A Index is at 89.95.

 

 

Commodity

 

 

 

 

Weekly

Weekly

Month

09/27/13

10/04/13

10/11/13

10/18/13

Change

% Change

Dec

Corn

$4.54

$4.43

$4.33

$4.42

$0.08

1.90%

Dec

CBOT Wheat

$6.83

$6.87

$6.92

$7.06

$0.14

1.95%

Dec

KCBT Wheat

$7.318

$7.503

$7.603

$7.688

$0.09

1.12%

Dec

MGEX Wheat

$7.32

$7.46

$7.55

$7.60

$0.05

0.73%

Nov

Soybeans

$13.20

$12.95

$12.67

$12.91

$0.24

1.93%

Dec

Soybean Meal

$418.30

$418.40

$403.40

$410.10

$6.70

1.66%

Dec

Soybean Oil

$41.81

$40.24

$40.28

$41.68

$1.40

3.48%

Oct

Live Cattle

$128.25

$128.05

$128.80

$129.88

$1.07

0.83%

Oct

Feeder Cattle

$164.13

$164.45

$167.48

$166.08

($1.40)

-0.84%

Dec

Lean Hogs

$88.13

$87.63

$86.50

$87.95

$1.45

1.68%

Dec

Cotton

$86.69

$86.94

$83.37

$83.11

($0.26)

-0.31%

Dec

Oats

$3.17

$3.18

$3.17

$3.36

$0.19

6.00%

Nov

Rice

$15.40

$14.87

$15.12

$15.29

$0.18

1.16%

 

Cattle futures rose $1.07 cents this week, a 0.8% gain. Cash cattle traded at $130 in the south and $204 in the north, with the latter $4 higher than the previous week. Beef production YTD is down 0.9% from 2012. Production this week was 4% smaller than the same week in 2012.  Our calculations show that ready numbers should be declining into November, based on prior Cattle on Feed placement data.  Weekly slaughter was 614,000 head vs. 639,000 head a year ago. USDA announced that the monthly Cattle on Feed, Livestock Slaughter and Cold Storage reports would all be released on October 31.

Hog futures were down 1.7% this week. Cash market information was limited until Thursday, when AMS quickly got back to work.  Pork production YTD is down 1.3% from year ago. Production this week was 3.8% smaller than the same week in 2012, with slaughter down 3.6%. Thus, you might conclude that average carcass weights were a little lower. USDA shows them down 1 pound. The pork carcass cutout value was $94.30 on Friday, down $7.76 or 7.6% from the last known Friday close on September 27.  Pork bellies typically decline with the end of BLT season and the advent of the fall hog run. This year is no exception, with that component down 26% in 3 weeks. Ribs and hams were down only about 2% during that same period.

Market Watch

USDA reports resumed on Thursday. Some regular reports will be issued on Monday, including Crop Progress and Export Inspections (which were collected all along but not officially summarized). Other data series will be delayed or in "jump ahead to present" mode. The regular weekly Hatchery report will be out on the 23rd, and is supposed to include back data. USDA will not issue October Crop Production or WASDE estimates.

Visit our Brugler web site at http://www.bruglermarketing.com, find our iPad app "AgMarket" in the app store, or call 402-697-3623 for more information on our consulting and advisory services for farm family enterprises and agribusinesses.

 

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.  

Copyright 2013 Brugler Marketing & Management, LLC

Time Warp

Oct 11, 2013

 Brugler

Market Watch with Alan Brugler

October 11, 2013

Time Warp 

The ripple effects of the federal debt standoff are spreading out and affecting more folks every day, due to paperwork that can’t be processed and checks that can’t be written. Government contractors who were still working are being told the window is closing soon as the bank accounts are drained. Craft beer brewers can’t even sell new types of beers because they need label approval and those federal employees aren’t working. Talk about stifling innovation! The grain and livestock trade has been limping along, using private and foreign data to fill in holes in information, but mostly stuck in a time warp. The Big Four packers and Big Four grain companies have inside information from their own operations which will likely be used against producers and end users as what is "known" by the public becomes stale. The reason we have daily Export Sales reports for transactions over 100,000 MT is because the Russians were able to buy massive quantities of wheat in the 1970’s at "big surplus" prices because nobody knew the size of the demand and that the ending stocks were rapidly shrinking. Similar things could be happening now, or perhaps the opposite scenario where supplies are building and a price crash comes once the information is confirmed.

December corn futures lost 2.3% this week on top of a 2.4% decline the previous week. They traded at the lowest level for a front month contract since August 2010. The overall tone continues to be bearish because of large anecdotal yield reports. EPA was rumored to be proposing a reduction in mandated corn based ethanol use for 2014 despite the abundant corn supplies. EPA rule making is also suspended by the government shutdown, however. If export business is picking up, it isn't publicly known. China bought some, but the full scope of activity is only known by the companies doing the deals. US ethanol production slowed a little last week to 868,000 barrels per day. An Ohio plant which has been closed since 2008 is due to start up next week and should add to the average daily production. Imports dropped to zero this past week and ethanol stocks dropped to 15.4 million barrels. Ethanol futures dropped to a 94 cent discount to gasoline, continuing to follow the corn market rather than the fuel market. It is a license to print money if you are blender and have E10, E15 or E85 distribution.

November soybean futures lost 28 cents per bushel on the week, about 2.2% on top of a 1.9% drop the week before. Friday marked the last day of the Goldman Roll selling and shrank the inverse to only ½ cent per bushel. Export inspections on Monday jumped to over 30 million bushels from 14.3 million bushels the prior week. Crush has been constrained by the slow pace of harvest, and there has been strong export demand and domestic feeder demand for soybean meal. Meal basis has backed off about $15/ton from recent highs as more beans become available, but it is still historically strong.

Wheat futures were higher in all three markets. KC gained the most ground, up 1.3% due to strong export buying interest and the small 2013 production. MPLS also rallied 1.1% on short covering and spread unwinding as spring wheat harvest wrapped up.  It wasn't due to a lack of competition, with Stats Canada confirming record high production of 33 MMT on record yields. Japan has been a steady buyer of US wheat, along with Brazil. Japan bought 39 thousand MTs of US wheat on Thursday. Seeding conditions for 2013/14 winter wheat are described as the best in years, resulting in a discount for new crop July Chicago and KC contracts vs. their old crop peers.

Cotton futures posted the worst weekly loss for the ag commodities, down 4.11% Friday/Friday. Nearly the entire decline came on Monday after heavy rains from Tropical Storm Karen proved to have minimal impact on standing cotton.  Cotlook reduced its global production estimate in September by 150,000 MT, with Chinese production dropped to 7 MMT. The huge cotton inventory held by the Chinese continues to hang over the market because any decisions to feed it into the market would greatly reduce imports from major exporters like the United States.

 

 

Commodity

 

 

 

 

Weekly

Weekly

Month

09/20/13

09/27/13

10/04/13

10/11/13

Change

% Change

Dec

Corn

$4.51

$4.54

$4.43

$4.33

($0.10)

-2.26%

Dec

CBOT Wheat

$6.46

$6.83

$6.87

$6.92

$0.05

0.76%

Dec

KCBT Wheat

$6.928

$7.318

$7.503

$7.603

$0.10

1.33%

Dec

MGEX Wheat

$6.99

$7.32

$7.46

$7.55

$0.09

1.14%

Nov

Soybeans

$13.15

$13.20

$12.95

$12.67

($0.28)

-2.18%

Oct

Soybean Meal

$413.40

$419.90

$431.30

$422.00

($9.30)

-2.16%

Oct

Soybean Oil

$42.09

$41.51

$39.99

$40.11

$0.12

0.30%

Oct

Live Cattle

$125.95

$128.25

$128.05

$128.80

$0.75

0.59%

Oct

Feeder Cattle

$160.22

$164.13

$164.45

$167.48

$3.02

1.84%

Oct

Lean Hogs

$90.05

$92.93

$91.85

$90.75

($1.10)

-1.20%

Dec

Cotton

$84.56

$86.69

$86.94

$83.37

($3.57)

-4.11%

Dec

Oats

$3.09

$3.17

$3.18

$3.17

($0.02)

-0.47%

Nov

Rice

$15.55

$15.40

$14.87

$15.12

$0.24

1.65%

 

Cattle futures rose 75 cents this week, a 0.6% gain. Cash cattle trade was slow to develop, with steady money at $200 in the north on Friday. Packer bids at $198 were being passed. The market is operating with limited information, as US slaughter, beef production, wholesale prices and export reports are all suspended. The UB Yellow Sheet showed choice boxes down 4 cents at midday on Friday, with select also down 4 cents. We do know that ready numbers should be declining into November, based on prior Cattle on Feed placement data.  Private estimates of weekly slaughter are down about 5,000 head from last week. CME Group indicated that October futures deliveries for cattle would proceed as usual, as the necessary grading and inspection is done via user fees and not subject to the USDA furloughs. Deliveries are being made, with another 10 lots at Amarillo on the 10th.

Hog futures were down 1.2% this week. Cash market information has been sparse, limited to terminal auction results that represent a very small % of total trade volume. The terminals were fully steady on Friday. CME Group has indicated that they will have to adjust the delivery procedure for October hog futures if there isn't USDA data to calculate the 2 day moving average used in the CME Lean Hog Index prior to expiration.  If the government data is not available by October 15, CME said it would calculate final settlements based on the volume weighted average price of the October lean hogs futures contract for the two-day period of October 11 and 14. The price would incorporate activity from both the electronic Globex platform and the open-outcry pit during "regular" trading hours, from 9:05 a.m. to 1 p.m. CDT (1405 to 1800 GMT) on October 11, and 9:05 a.m. to 12:00 noon on October 14.

Market Watch

USDA reports are still suspended due to the lack of funding. If there is somebody out there who can benefit from a lack of information for the counterparty, they are likely taking advantage! EIA funding ran out on October 11, so there will be no more weekly ethanol reports until the Washington situation is resolved. Non-US information sources are getting extra emphasis in the data void. So are private sources, but many of those don’t have the same level of rigor used by USDA. Monday is Columbus Day, a government and banking holiday in the United States. The ag commodity markets will be trading as usual. NOPA is expected to issue their normal monthly Crush report on Tuesday. CME Lean Hogs will expire on Monday.  USDA is scheduled to release a Cattle on Feed report on Friday, but it will likely have to be delayed.

Visit our Brugler web site at https://www.bruglermarketing.com, find our iPad app "AgMarket" in the app store, or call 402-697-3623 for more information on our consulting and advisory services for farm family enterprises and agribusinesses.

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.  

Copyright 2013 Brugler Marketing & Management, LLC

Trains With No Engineers

Oct 04, 2013

 Brugler

Market Watch with Alan Brugler

October 4, 2013

Trains With No Engineers

 

There have been several incidents in recent years of empty or unmanned trains rolling down the tracks and eventually derailing or smacking into another train. There are some similarities to the current budget battle in Washington and its side effects. We are careening down the tracks, and there doesn't appear to be an engineer driving. Due to the Administration decision to shut down government web sites and data collection across a wide swath of the economy, many of the trains (economic, not literal) are running without signals on the tracks. Without the red light, there is a tendency for the train to keep going. We have noted overbought or oversold conditions in a number of commodity markets because they aren’t getting any signals to slow down, and half of the passengers are enjoying the ride. Corn and soybeans are in the oversold camp, while wheat, cattle and feeder cattle are overbought.

 

December corn futures lost 2.4% this week, taking out the August low while awaiting USDA production data on the 11th.  That train may not be coming, at least not on time. The overall tone continues to be bearish because of large anecdotal yield reports. As always the question to ask is "It surprised you, but did it surprise USDA?" If export business is picking up, it isn't publicly known. US ethanol production jumped sharply this past week to 875,000 barrels per day. Imports slowed to 14,000 bpd, and ethanol stocks dropped to 15.5 million barrels despite the larger domestic production.

 

November futures lost 25 cents per bushel on the week, about 1.9%. Weekly export sales were not reported. Export inspections on Monday were 14.3 million bushels. Shipments since September 1 are still 10 million below year ago, due to an overhang of South American supplies still being shipped. Soybean meal was the bull leader for all the ag commodities, as long as you were looking at the October contract. There is a bit of a short squeeze under way, with zero deliveries thus far against the contract. Crush has been constrained by the slow pace of harvest, and there has been strong export demand and domestic feeder demand for the product. Thus, limited interest in making supplies available for delivery.  Stats Canada reported a smaller than expected 16 MMT canola production number on Friday, but soy oil showed little reaction.

 

Wheat futures were solidly higher on the week. KC gained the most ground, up 2.5% due to strong export buying interest and the small 2013 production. MPLS also rallied 2% on short covering and spread unwinding as spring wheat harvest wound down. It wasn't due to a lack of competition, with Stats Canada confirming record high production of 33 MMT on record yields. Japan has been a steady buyer of US wheat, along with Brazil. China is also shipping large quantities bought previously.

 

Cotton futures marked time this week, netting only .17 cent per pound. That was still the highest Friday close in more than a month. Harvest continues to run a little behind normal at 7% complete, but old crop stocks are adequate to carry us for a while and global stocks are still seen as being record large in 2013/14. China is rumored to be looking for a different price support mechanism for 2014, but the CCA meeting on September 27 did not result in any policy announcement.  Cotlook reduced its global production estimate in September by 150,000 MT, with Chinese production dropped to 7 MMT.

 

 

Commodity

 

 

 

 

Weekly

Weekly

Month

09/13/13

09/20/13

09/27/13

10/04/13

Change

% Change

Dec

Corn

$4.59

$4.51

$4.54

$4.43

($0.11)

-2.37%

Dec

CBOT Wheat

$6.42

$6.46

$6.83

$6.87

$0.04

0.59%

Dec

KCBT Wheat

$6.915

$6.928

$7.318

$7.503

$0.19

2.53%

Dec

MGEX Wheat

$7.06

$6.99

$7.32

$7.46

$0.15

2.02%

Nov

Soybeans

$13.82

$13.15

$13.20

$12.95

($0.25)

-1.88%

Oct

Soybean Meal

$444.60

$413.40

$419.90

$431.30

$11.40

2.71%

Oct

Soybean Oil

$42.34

$42.09

$41.51

$39.99

($1.52)

-3.66%

Oct

Live Cattle

$125.25

$125.95

$128.25

$128.05

($0.20)

-0.16%

Oct

Feeder Cattle

$159.27

$160.22

$164.13

$164.45

$0.33

0.20%

Oct

Lean Hogs

$90.70

$90.05

$92.93

$91.85

($1.07)

-1.16%

Oct

Cotton

$85.21

$83.33

$85.66

$85.83

$0.17

0.20%

Dec

Oats

$3.12

$3.09

$3.17

$3.18

$0.02

0.47%

Nov

Rice

$15.42

$15.55

$15.40

$14.87

($0.53)

-3.44%

 

Cattle futures lost 20 cents this week, a 0.16% drop after rising nearly 2% the previous week. Cash cattle trade was mostly steady for the week at $126 in the south and $198-200 in the north on Thursday afternoon and Friday morning.  The market is operating with limited information, as US slaughter, beef production, wholesale prices and export reports are all suspended. We do know that ready numbers should be declining into November, based on prior Cattle on Feed placement data.  CME Group indicated that October futures deliveries for cattle would proceed as usual, as the necessary grading and inspection is done via user fees and not subject to the USDA furloughs.

 

Hog futures were down 1.16% this week. Cash market information has been sparse, limited to auction results that represent a very small % of total trade volume. Retail meat prices are said to be a touch weaker, but with no hard data. Chicken producers are expected to still be expanding, but nobody except maybe Tyson or Sanderson has a good handle on it. They're not talking. CME Group has indicated that they might have to adjust the delivery procedure for October hog futures if there isn't USDA data to calculate the 2 day moving average used in the CME Lean Hog Index prior to expiration.  

 

Market Watch

 

USDA reports are still suspended due to the lack of a budget. Ditto for Census and CFTC reports. If there is somebody out there who can benefit from a lack of information for the counterparty, they are likely taking advantage! Weekly ethanol production and stocks are still expected on Wednesday, but we are told that EIA funding is only good until October 11. That leaves a heavy dependence on private reports like the NOPA crush report expected this week, and on technical analysis. Non-US information sources are also getting extra emphasis. USDA is scheduled to release a Crop Production report on the 11th.  We are skeptical that it can be released because nobody has been in the office to collate the data.

 

Visit our Brugler web site at https://www.bruglermarketing.com, find our iPad app "AgMarket" in the app store, or call 402-697-3623 for more information on our consulting and advisory services for farm family enterprises and agribusinesses.

 

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.  

Copyright 2013 Brugler Marketing & Management, LLC

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