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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.

Rolling On

Mar 02, 2012

Brugler

Market Watch with Alan Brugler

March 2, 2012

Rolling On

 

Soybean futures have continued to march higher, ignoring rain in a few still growing areas of Argentina and southern Brazil, a sometimes firmer US dollar, and overbought technical conditions. Money flow is a factor, with the Managed Money (spec funds) continuing to add long positions in the bean complex. Nearby March beans were up another 49 cents this week, a 3.85% advance. The soybean meal market was up over 7% for the week, supporting the rise in the beans. Soybean oil was actually down 1% as diesel/heating oil prices backed off. Weekly export sales were stronger than expected but still run behind last year for both current year commitments and advance commitments for new crop shipment.  The Managed Money net long position in soybeans was up 20,707 contracts from the previous week in Friday’s CFTC Commitment of Traders report.

 

Corn futures rallied 2.8% for the week, or 18 cents per bushel after being down a penny the week before. Weekly export sales were disappointing, less than a million metric tonnes. On the bull side, China was shown as buying two more vessels of old crop corn in the weekly USDA Export Sales report, and export shipments continue to run very close to year ago levels despite expectations for a drop off of more than 100 million bushels from year ago. A Memphis based forecasting firm estimates Argentina will raise 22.5 MMT of corn this year. That’s .5 MMT higher than USDA projections. That same group puts the Brazilian corn crop at 61.5 MMT. That’s also .5 MMT over the USDA February projections.

 

 

Commodity

 

 

 

 

Weekly

Weekly

Month

02/10/12

02/17/12

02/24/12

03/02/12

Change

% Change

Mar

Corn

$6.32

$6.42

$6.41

$6.59

$0.18

2.85%

Mar

CBOT Wheat

$6.30

$6.44

$6.41

$6.71

$0.30

4.64%

Mar

KCBT Wheat

$6.73

$6.90

$6.81

$7.11

$0.30

4.33%

Mar

MGEX Wheat

$8.14

$8.22

$7.87

$8.28

$0.41

5.24%

Mar

Soybeans

$12.29

$12.68

$12.79

$13.28

$0.49

3.85%

Mar

Soybean Meal

$320.00

$332.50

$333.60

$357.30

$23.70

7.10%

Mar

Soybean Oil

$52.53

$53.40

$54.29

$53.76

($0.53)

-0.98%

Apr

Live Cattle

$126.80

$130.90

$129.50

$129.95

$0.45

0.35%

Mar

Feeder Cattle

$154.15

$158.42

$157.68

$158.10

$0.42

0.27%

Apr

Lean Hogs

$88.58

$90.38

$89.73

$90.43

$0.70

0.78%

Mar

Cotton

$90.61

$91.45

$89.85

$87.46

($2.39)

-2.66%

Mar

Oats

$3.18

$3.24

$3.20

$3.28

$0.09

2.66%

Mar

Rice

$13.72

$14.14

$14.21

$14.27

$0.06

0.42%

 

 

 The wheat complex saw all three exchanges in the plus column, with KC and CHI up 4.3 and 4.6% respectively and MPLS up 5.24% after being the laggard the week before. The Managed Money (large specs) decreased their net short in Chicago wheat by 9,270 contracts from the previous week. U.S. wheat exports have been slowing down and the higher dollar could limit interest if the rally continues. Improving weather in the Black Sea Region will open up exports from that area (which had been bottled up for much of February) creating more competition with Europe. Indonesia is expected to tender for 300,000 MT of milling wheat.

 

Cotton futures dropped another 239 point after being down 160 points the week before. There were steady deliveries against March futures, which discouraged spec longs from remaining in the contract. Managed Money increased their net short cotton position by 7,137 contracts from the previous week. Total Upland cotton export commitments year to date are 10,389,407 RB compared to the same week last year of 14,587,959 RB. The market is assuming larger supplies will be available going forward, and is cutting back on forward commitments as a result. A Memphis firm increased their global cotton production estimates because of higher expected cotton plantings to 122.8 million bales. The USDA was at 123.34 million bales as of the February report so the private estimate is still smaller.


Cattle futures had a lot of excitement, but ended the week only 45 cents higher than they started it. Negotiated cash trade ended the week at $128 to $130 in TX/OK, $128.50 to $131 in KS in the live with 423 head selling for $207.50 in the dressed. That’s a new all time high. Nebraska cash cattle sold for $125 to $130 in the live and $205 to $206 in the dressed, a record high on a daily basis. Wholesale beef prices were lower on Friday, but did gain 66 cents for the week in the Choice and 40 cents in the select.


Lean Hog futures were up 70 cents for the week.  CFTC showed that Managed Money decreased their net long position in hogs by 2,878 contracts from the previous week. Cash hogs in IA/MN were down $1.42, WCB hogs were $1.13 lower and ECB hogs were $1.58 lower. The CME Lean Hog Index was at 87.55, down 0.08 for February 29th and a penny higher than a week ago. Pork trading was slow with light to moderate demand and offerings. The Carcass cutout was higher on Friday but remains stuck in a $4 trading range.

 

Market Watch: The main USDA reports for this coming week fall on Friday the 9th, with Crop Production, Dairy Products Prices and the monthly WASDE Supply/Demand estimates are  due out at 7:30 am CST. The routine reports are the Export Inspections on Monday morning and the weekly Export Sales on Thursday morning.  Thursday is the last trading day for March cotton futures. Not to be overlooked, Daylight Savings time resumes in the US on the 11th.

 

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.

 

 Copyright 2012 Brugler Marketing & Management, LLC

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