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Market Watch

RSS By: Alan Brugler, AgWeb.com

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

Grains Try To Rally

Jan 20, 2012

Brugler

Market Watch with Alan Brugler

January 20, 2012

 

Corn futures were up 5 ½ cents on Friday, and gained a net 2% for the week after plunging 44 cents the week prior in the aftermath of the January 12 USDA reports. Trade estimates for weekly export sales ranged from 500 to 900 thousand MT. USDA put the actual figure at 759,900 MT on Friday morning, smack in the middle of the estimates. China continues to buy and ship US corn, mostly via switches from "unknown destinations" sales. There were sales of 142,400 MT to "unknown" this week. Confirmed Chinese sales of 132, 200 MT for the week all came on a switch from previous unknown destination sales.

The wheat complex was again mixed. This time it was Chicago’s turn to gain ground, while KC and Minneapolis were fractionally lower. USDA reported net weekly export sales through January 12 at 584,200 MT, including a net cancellation for 2012/13 sales. Trade estimates ranged from 350 to 600 thousand MT, so this was on the upper end of expectations. KC protein basis has been on fire, with 11.6-12.6% protein wheat basis firming 13 to 18 cents yesterday alone. We also note that the MGE will permit Canadian wheat to be delivered against futures, beginning with the September 2012 new crop contract.

Soybeans were up 2.5% for the week, recovering 28 ¾ of their loss from the USDA report week. Trade estimates ranged from 500 to 900 thousand MT for the USDA weekly export sales report this morning. USDA put the actual number at 991,100 MT. China and Indonesia were the two largest buyers. The La Nina weather pattern is expected to continue until the May-June period, but is expected to decline in strength. At the moment, the drought in southern Brazil and Argentina is no longer a dome, but more of a leaky roof. There are still dry areas that are stressed, and the longer range forecasts have more dry weather in them after fairly widespread showers.

Cotton rose 3.28% for the week. USDA reported net weekly export sales for last week were 189,400 RB for 2011/12 delivery and were 22,500 RB for 2012/13 delivery.  This was up noticeably from the previous week and the four week average. Pima sales were also up 19% from the four week average at 6,700 RB.

 

Commodity

 

 

 

 

Weekly

Weekly

Month

12/30/11

01/06/12

01/13/12

01/20/12

Change

% Change

Mar

Corn

$6.47

$6.44

$6.00

$6.12

0.1200

2.00%

Mar

CBOT Wheat

$6.53

$6.25

$6.02

$6.11

0.0825

1.37%

Mar

KCBT Wheat

$7.12

$6.80

$6.70

$6.67

0.0300

0.45%

Mar

MGEX Wheat

$8.50

$8.01

$8.01

$7.99

0.0250

0.31%

Mar

Soybeans

$12.08

$11.97

$11.58

$11.87

0.2875

2.48%

Mar

Soybean Meal

$313.10

$312.40

$301.50

$311.90

10.4000

3.45%

Mar

Soybean Oil

$52.42

$51.12

$50.29

$50.43

0.1400

0.28%

Feb

Live Cattle

$121.97

$120.40

$122.77

$124.55

1.7800

1.45%

Jan

Feeder Cattle

$146.35

$147.30

$150.58

$151.63

1.0500

0.70%

Feb

Lean Hogs

$84.30

$83.90

$85.60

$85.33

0.2750

0.32%

Mar

Cotton

$91.38

$95.86

$95.47

$98.60

3.1300

3.28%

Mar

Oats

$3.10

$2.87

$2.83

$2.95

0.1200

4.25%

Mar

Rice

$14.86

$14.68

$14.44

$14.54

0.0950

0.66%

 

Cattle futures rallied hard all week, and gained 1.45% for the week. Cash cattle trade was up $3 on Friday, affirming the bull move in the futures. USDA weekly export sales through Jan 12 were 16,200 MT, much stronger than usual for mid-January. Boxed beef prices saw further deterioration in the Choice, down 1.2% for the week, while Select was only off a nickel from the previous Friday.  The USDA Cattle on Feed report on Friday afternoon showed Jan 1 numbers at 103% of year ago, with December placements at 94.1% and marketings at 98.1%. The report is bull friendly, but might have a short rope given the Board rally ahead of the release.

Lean Hog futures were down 27 cents for the week.  The pork cutout was up $1.79 for the week, a 2.1% increase on a Friday/Friday basis, with the belly and rib primal the strongest parts of the hog. Estimated pork production for the week was up 0.8% from the previous week and 2.4% larger than the same week in 2011. Average dressed weight is estimated at 209 pounds, which is equal to year ago.

Market Watch: The markets will be open all week in the US, and closed all week in China.  Livestock traders will start the week reacting to the USDA Cattle on Feed and Cold Storage reports which were released after the market closed on Friday. The Fed will meet on Tuesday and Wednesday. No rate hikes are expected. The regular USDA export reports will be released on Monday (Inspections) and Thursday (Export Sales). January feeder cattle expire on Thursday. USDA will release the semi-annual Cattle Inventory report on Friday afternoon. Friday will also mark the expiration of the February serial grain options.

There is a risk of loss in futures and options trading.  Such trading is not appropriate for all individuals. Past performance is not necessarily indicative of future results.  Comments made in this article are in no way to be seen as an endorsement of futures and options trading. Reproduction or rebroadcast of any portion of this article without written consent of Brugler Marketing & Management LLC is strictly prohibited.  Call 402-697-3623 for information on our individualized subscription and consulting services. Our web site is www.bruglermarketing.com

 

 Copyright 2012 Brugler Marketing & Management, LLC

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