Jul 22, 2014
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April 2014 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.

The Twitching Hour

Apr 25, 2014

 Brugler

Market Watch with Alan Brugler

April 24, 2014

The Twitching Hour

 

Financial markets of all types seem to be "twitchy" right now. The dictionary definition for twitchy is jerky, spasmodic or restless. The stock market seems unable to sustain a move in either direction for more than 4-5 days at a time (see the Dow since March 1). Ditto for the bond market. Cattle and hogs have shown symptoms. Some would blame the Ukraine situation, but we see that as mostly noise from a strictly financial viewpoint. It is difficult to see the EU or US willing to actually put troops at risk to prop up a shaky Ukrainian government, even if a pro-Western government there would be desirable. There are too many similarities to Vietnam. Sanctions to date have been laughable. It is more likely a period where trends are trends to be ridden (grains) and sideways is sideways (equities, bonds, etc).  

Corn rallied 2.5% for the week, gaining three times what it lost the week before. USDA reported another rise in weekly export sales for the week ending April 17, with combined old and new crop just over 1 MMT for the week vs. 794,500 MT the previous week.  Total commitments are 97% of the newly raised USDA annual projection. It would typically be 86% of the full year figure by now. Daily average ethanol production slowed after hitting the highest level since December the previous week. Ethanol stocks rebounded 500,000 barrels due primarily to transportation limitations. Ethanol imports also showed up again for the third time this year. According to the IGC, global corn output for 2014-15 is forecast to reach 950 MMT, revised sharply lower from last month's estimate of 961 MMT. The Commitment of Traders report on Friday night showed that the large speculator funds were reducing their net long position as of last Tuesday, reducing it by 13,868 contracts.

Soybean futures were down a little over 1% this week, despite a sharply rally on Friday. Meal was up 0.47%, while soy oil was down 1.1%. The weekly US soybean export sales announced on Thursday totaled only 119,000 MT (including 118,200 MT for 14/15).  Total commitments as a % of total exports are now at 104% compared to 100% last year and the 5 year average of 96%. The Commitment of Traders report on Friday showed the spec funds reduced their soybean net long position by 21,386 contracts in the previous reporting week.

 

 

Commodity

 

 

 

 

Weekly

Weekly

Month

04/04/14

04/11/14

04/18/14

04/25/14

Change

% Change

May

Corn

$5.02

$4.99

$4.95

$5.07

$0.12

2.48%

May

CBOT Wheat

$6.70

$6.60

$6.91

$7.00

$0.09

1.30%

May

KCBT Wheat

$7.34

$7.20

$7.58

$7.76

$0.18

2.31%

May

MGEX Wheat

$7.22

$7.02

$7.33

$7.46

$0.13

1.77%

May

Soybeans

$14.74

$14.63

$15.14

$14.98

($0.16)

-1.06%

May

Soybean Meal

$479.10

$472.90

$488.30

$490.60

$2.30

0.47%

May

Soybean Oil

$41.57

$42.10

$43.41

$42.92

($0.49)

-1.13%

April

Live Cattle

$143.05

$144.85

$144.20

$145.00

$0.80

0.55%

May

Feeder Cattle

$178.53

$180.08

$178.05

$184.63

$6.57

3.69%

Jun

Lean Hogs

$120.55

$121.23

$124.83

$124.53

($0.30)

-0.24%

May

Cotton

$92.40

$89.02

$90.17

$92.95

$2.78

3.08%

May

Oats

$4.11

$4.04

$4.04

$4.03

($0.01)

-0.37%

May

Rice

$15.76

$15.66

$15.36

$15.42

$0.06

0.39%

 

Wheat futures were higher again this week, up .13 to 2.3% across the various classes. The worsening of drought conditions in TX and KS this week was a supportive factor, along with more hard evidence about earlier freeze damage.  USDA put the weekly export sales at 610,800 MT (including 271,700 MT for 14/15) for the week ending April 17. Total commitments as a % of total US exports are now at 97% compared to 100% last year and the 5 year average of 101%.  The EU approved another 378,000 MT of wheat for export, taking the total for the year to roughly to 24.7 MMT.  Stats Canada reported Canadian acreage intentions of 24.9 million, a little larger than expectations but still down from year ago.

Cotton futures were up 3.1% this week. USDA put weekly export sales for Cotton at 152,000 RB, including 140,500 RB of upland and 11,500.RB of pima. China was the largest buyer despite recent government efforts to encourage more use of domestic stocks and reduce imports. Total US commitments as a % of total exports are now at 94% compared to 96% last year and the 5 year average of 99%.  Speculative longs added 3,982 contracts to their net position in the last reporting week, bringing the CFTC total to 57,248.

Cattle futures were up 0.55% this week. Cash cattle trade was slow to develop, but trading did start to develop around $145 and more cattle were available at $147. April futures were being supported all week by their discount to the cash market. Estimated weekly slaughter of 585,000 was above last week’s Easter weekend reduced number but 40,000 below year ago. Wholesale prices rallied sharply this week. Choice boxed beef was up 3.0%, while Select gained 3.1% on a Friday/Friday basis. USDA weekly beef export sales backed off to18, 000 MT. After the close on Friday, USDA released the monthly Cattle on Feed report. The April 1 On Feed number was smaller than expected at 99.4% of year ago, with placements during March at 95.3%. March marketings were about as expected, at 96.3%.

June Hog futures were down 0.24% this week. The pork carcass cutout lost 4.29% this week after falling the prior week. The product value is down $17.61/cwt since April 3. Weekly FI slaughter was projected at 1.938 million head vs. 2.088 million a year ago. That meant weekly slaughter was down 6.8% from last year, but due to higher carcass weights the pork production was only down 3.5%. USDA weekly export sales for pork responded to the drop in carcass prices, with USDA reporting a jump in weekly sales to 15,100 MT on Thursday.

Market Watch

Cattle traders will begin the week reacting to the Friday night Cattle on Feed report. Grain traders will be reacting to any surprise positions inherited via the May options exercises on Friday. USDA will give us the usual weekly Export Inspections on Monday morning, and the increasingly significant planting progress and crop condition ratings on Monday evening. Spec funds will be making asset allocation adjustments as we come into month end on Wednesday, selling winners and buying losers. April cattle futures will also expire on Wednesday.  USDA will release weekly Export Sales on Thursday morning, also May Day in some countries. Friday will mark the expiration of May serial cattle options.

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 2014 Brugler Marketing & Management, LLC

Hopping Around

Apr 17, 2014

 Brugler

Market Watch with Alan Brugler

April 17, 2014

Hopping Around 

Easter is upon us, with a 3-day market weekend. Appropriate to the Easter bunny theme, wheat futures have been hopping all over the place after plunging down the rabbit hole for the first 10 days of the month.  They were the bull leader this week in terms of % gain.  May rice apparently has too much competition from chocolate eggs and marshmallow peeps, losing 1.9% to turn in the worst performance for the week.

Corn futures lost 4 cents per bushel this week, or 0.75%. USDA reported a rise in weekly export sales for the week ending April 10, putting them at 794,500 MT vs. 716,700 MT the previous week. That is 96% of the newly raised USDA annual projection. It would typically be 84% of the full year figure by now. Sales are still strong. Three more cargos initially sold to China were diverted to other countries. Given the large Chinese internal stocks, we would expect a slow resolution to the MIR-162 issue, and continued switches as it becomes apparent that the policy will not change in time to allow the shipments to be delivered. Daily average ethanol production surged to the highest level since December, at 937,000 bpd. Despite the larger production, ethanol stocks declined 400,000 barrels to 16 million. Ethanol imports reverted to zero for the week.

Soybean futures were up sharply for the week, posting a gain of 3.5% or 51 cents per bushel.  Meal was up 3.26%, while soy oil rallied 3.1%. Old crop beans hit a high of $15.31 3/4 on Thursday. The monthly NOPA crush report on Tuesday showed about 7 million bushels more beans used than had been expected. This is significant when we are expected to be down to pipeline supplies this summer (135 million). The weekly US soybean export sales announced on Thursday rose to 419,900 MT from only 289,500 MT the prior week. Total US export Commitments for 2013/14 are now at 104% of the USDA forecast for the year. The 5 year average pace for this week is 95%.

 

 

Commodity

 

 

 

 

Weekly

Weekly

Month

03/28/14

04/04/14

04/11/14

04/18/14

Change

% Change

May

Corn

$4.92

$5.02

$4.99

$4.95

($0.04)

-0.75%

May

CBOT Wheat

$6.96

$6.70

$6.60

$6.91

$0.31

4.70%

May

KCBT Wheat

$7.64

$7.34

$7.20

$7.58

$0.39

5.35%

May

MGEX Wheat

$7.40

$7.22

$7.02

$7.33

$0.31

4.42%

May

Soybeans

$14.37

$14.74

$14.63

$15.14

$0.51

3.49%

May

Soybean Meal

$468.40

$479.10

$472.90

$488.30

$15.40

3.26%

May

Soybean Oil

$40.48

$41.57

$42.10

$43.41

$1.31

3.11%

April

Live Cattle

$146.50

$143.05

$144.85

$144.20

($0.65)

-0.45%

May

Feeder Cattle

$179.50

$178.53

$180.08

$178.05

($2.02)

-1.12%

Jun

Lean Hogs

$129.58

$120.55

$121.23

$124.83

$3.60

2.97%

May

Cotton

$93.74

$92.40

$89.02

$90.17

$1.15

1.29%

May

Oats

$4.02

$4.11

$4.04

$4.04

$0.00

0.12%

May

Rice

$15.51

$15.76

$15.66

$15.36

($0.30)

-1.88%

 

Wheat futures were 4.42 to 5.35% higher this week, thanks to hard freezes in both HRW and SRW country. The worsening of drought conditions in TX and KS this week was also a supportive factor. Weekly wheat export sales reported this week were 797,000 MT, up from 390,900 MT last week. US export sales commitments are 96% of the USDA projection for full year shipments. They would typically be at 100% by now, with the marketing year ending May 31. The EU approved another 421,000 MT of wheat for export, taking the total for the year to roughly to 24.3 MMT.  The extra 7-8 MMT of shipments vs. last year have crowded out some US sales that might otherwise have been made.  Crop condition ratings declined for HRW, with the Brugler500 HRW index dropping to 279 from 282. It was worse last year, at 262.

Cotton futures were up 1.3% this week. USDA put weekly export sales for cotton last week at 239,800 running bales, up from 109,600 RB last week. Total commitments as % of total exports are now at 93% compared to 94% last year and the 5 year average of 98%. The Fed Beige Book released on April 7 showed an increase in economic activity in most of the Fed regions, generally perceived as helpful to consumer spending and textile consumption.

Cattle futures were up 1.26% this week. Cash cattle trade was $146 in the south on Wednesday, with a limited number sold at $240 in the north. Packer bids in the north were mostly $237. April futures were being supported by their discount to the cash market. Week to date slaughter (through Thursday) at 458,000 head was down from 460,000 the prior week. Wholesale prices posted a modest rebound against their retreat from the March 18 high. Choice boxes were up 0.39% this week, while Select gained 0.53% on a Thursday/Thursday basis. Week to date estimated slaughter at 458,000 head was down 2,000 from last week and 24,000 below year ago. USDA weekly beef export sales were the largest of the marketing year at 21,900 MT. They typically expand at this time of year, but are showing very little price rationing damage.  

April Lean Hog futures were up 2.97% this week. April futures expired below the CME Index, but that 2-day moving average came down to their expiration level two days later. The pork carcass cutout lost 3.53% this week on a Thursday/Thursday basis. Week to date slaughter through Thursday totaled 1.621 million head, down from 1.627 million the prior week and 1.672 million a year ago for the equivalent Thursday. USDA weekly export sales for pork responded to the drop in carcass prices, with USDA reporting 8,600 MT on Thursday vs. 4,200 MT the prior week.

Market Watch

USDA will issue the usual Export Inspections report on Monday morning, and a weekly Crop Progress report on Monday evening. USDA Cold Storage report will be released on Tuesday, with keen interest in whether or to what degree packers and wholesalers were stockpiling inventory against summer shortages. USDA weekly export sales are due out on Thursday morning. The monthly USDA Cattle on Feed report is scheduled for release on Friday afternoon.  Friday will also mark the expiration of the May grain options.

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 2014 Brugler Marketing & Management, LLC

Railroad Blues

Apr 11, 2014

 Brugler

Market Watch with Alan Brugler

April 11, 2014

Railroad Blues

 

If there was a common theme to the grain markets this week, it was the Railroad Blues. Nearly all of the commodity organizations were testifying, lobbying or tweeting their displeasure over the inability of the US rail system to pick up needed cars on time and return the empties on time. The delays have had a serious economic impact on cash grain prices, fertilizer, ethanol, DDGS, coal, etc through basis adjustments or outright spot shortages and surpluses. River and lake openings should help a little, but it looks like it will be months before things return to anything resembling normal.

Corn futures rallied into the USDA reports on Wednesday morning, but closed 3 cents lower for the week despite nominally bullish numbers in the reports themselves. USDA hiked projected US exports by 125 million bushels, and trimmed ending stocks to 1.331 billion bushels. That took the stocks/use ratio below 10% and increased the cash average price estimate to $4.60 for the marketing year. The bearish news later in the week included a slowdown in corn export sales to 716,700 MT from 998,500 MT the week before. Daily average ethanol production slowed while ethanol stocks increased, a bearish combination. The pace of imports also increased from 11,000 bpd to 38,000 bpd as US prices exceeded the breakeven for imports from Brazil into the East and West Coast markets. Rail snafus continue to hinder US ethanol movement, as they are also doing with coal and grain. The CFTC Commitment of Traders report on Friday afternoon showed a reduction in the spec fund net long position. They reduced their exposure ahead of the April 9 reports. The Managed Money reporting category cashed out 5,699 long positions this week, reducing the net long to 270,137 contracts as of April 8.

Soybean futures were down 11 cents per bushel for the week, a 0.73% drop. Meal was down 1.29%, while soy oil rallied 1.27%. Old crop beans hit a high of $15.12 on Wednesday but sold off hard into the weekend. USDA tightened projected old crop ending stocks to 135 million bushels, both raising exports and imports. The weekly US soybean export sales announced on Thursday slowed to a paltry 79,100 MT of old crop, with new crop jumping to 210,400 MT.  Total US export Commitments for 2013/14 are now at 100% of the USDA forecast for the year. USDA announced another 330,000 MT of new crop sales to "unknown destinations" on Friday morning. As of the close on this past Tuesday, CFTC shows managed money accounts were exiting longs ahead of the USDA report. Their net long shrank12, 194 contracts bringing their overall net long position to 181,252 contracts.

 

 

Commodity

 

 

 

 

Weekly

Weekly

Month

03/21/14

03/28/14

04/04/14

04/11/14

Change

% Change

May

Corn

$4.79

$4.92

$5.02

$4.99

($0.03)

-0.65%

May

CBOT Wheat

$6.93

$6.96

$6.70

$6.60

($0.09)

-1.42%

May

KCBT Wheat

$7.71

$7.64

$7.34

$7.20

($0.14)

-1.94%

May

MGEX Wheat

$7.43

$7.40

$7.22

$7.02

($0.20)

-2.74%

May

Soybeans

$14.09

$14.37

$14.74

$14.63

($0.11)

-0.73%

May

Soybean Meal

$455.90

$468.40

$479.10

$472.90

($6.20)

-1.29%

May

Soybean Oil

$41.02

$40.48

$41.57

$42.10

$0.53

1.27%

April

Live Cattle

$144.00

$146.50

$143.05

$144.85

$1.80

1.26%

Apr

Feeder Cattle

$175.28

$178.35

$177.70

$179.50

$1.80

1.01%

April

Lean Hogs

$125.68

$125.58

$123.15

$124.93

$1.77

1.44%

May

Cotton

$93.31

$93.74

$92.40

$89.02

($3.38)

-3.66%

May

Oats

$4.15

$4.02

$4.11

$4.04

($0.07)

-1.77%

May

Rice

$15.43

$15.51

$15.76

$15.66

($0.10)

-0.67%

Wheat futures were down 1.4 to 2.7% for the week, with Minneapolis down the hardest. Weekly wheat export sales reported this week were 390,900 MT, down from 646,900 MT the previous week. Old crop sales were only 41,800 MT. That encouraged the already aggressive bears. USDA wheat ending stocks were hiked to 583 million bushels. No change was made to exports, but feed use was reduced 30 mbu based on the March 1 stocks data and projected imports were trimmed back 5 million. The EU approved another 585,000 MT of wheat for export, taking the total for the year to roughly to 23.9 MMT. As of the close on April 8, managed money accounts were starting to cash out their new net long in CBT wheat, exiting 1,836 contracts for the week and bringing the long to 43,189 contracts. The big spec funds exited 4,731 longs in KC this week, cutting the net long to 40,978 contracts in KC wheat.

Cotton futures were down 3.6% this week after dropping 1.4% the prior week. USDA put weekly export sales for cotton last week at 109,600 RB, but old crop sales were net negative. Total commitments as % of total exports are now at 92% compared to 93% last year and the 5 year average of 97%. The weekly Commitment of Traders report showed managed money accounts paring back their net long position by 3,635 contracts. That left the net position at 59,670 long.

Cattle futures were up 1.26% this week. Cash cattle trade was spotty, with packers relying on captive cattle. Some traded at $148 in the south, with most asking prices on Friday at $150. April futures were being supported by their discount to the cash market. Weekly slaughter at 573,000 was down from 583,000 the prior week and 607,000 a year ago. Wholesale prices continued to retreat from the March 18 high. Choice boxes were down 2.9% this week, while Select dropped 2.3%. Weekly estimated slaughter at 583,000 head was down 2,000 from last week and 14,000 below year ago. Beef production YTD is down 5.9% from last year. USDA weekly beef export sales totaled 13,800 MT, up slightly from 13,300 MT the prior week and showing little price rationing damage.  

 

April Lean Hog futures were up 1.44% this week. April futures were supported by their discount to the CME Lean Hog Index, and the need to converge with that Index on April 14. Estimated weekly slaughter was 2.02 million head, down 10,000 head from the previous week. That was down 3.9% from the same week in 2013 and thus supportive to nearby pork prices. Carcass weights were up 6# from last year, which meant pork production for the week was down only 0.4% despite the light run. The pork carcass cutout lost 4.76% this week, with hams extremely week as processor demand dried up. USDA weekly export sales for pork were the poorest of the year at 4,200 MT. The CFTC Commitment of Traders report shows spec long liquidation of 3,267 contracts for the week, leaving the managed money crowd net long 70.655 contracts.

 

Market Watch

 

The cotton market will start the week adapting to any surprise futures positions inherited upon options expiration on the weekend.  USDA will issue the usual Export Inspections report on Monday morning, and hopefully a weekly Crop Progress report on Monday evening (last week was delayed until Tuesday). NOPA crush is scheduled for release on Tuesday or Wednesday. USDA weekly export sales are due out on Thursday morning. Equity options expire on the 17th, as do April feeder cattle. The US markets are closed on Friday for the Good Friday holiday and Easter weekend.

 

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 2014 Brugler Marketing & Management, LLC

A Whole New Ball Game

Apr 04, 2014

 Brugler

Market Watch with Alan Brugler

April 4, 2014

It’s a Whole New Ballgame

 

Major League baseball started its 2014 season this week, trying to jazz things up with some unusual venues but still with a long season ahead. While the NCAA basketball tournament is still wrapping up, and the NBA will drag on into June, the seasonal switch in attention is underway. The grain and livestock markets are also showing that is a whole new ball game, with hogs and wheat selling off sharply since the calendar turned to April. The other grains and oilseeds are still trying to determine whether they’ve given adequate attention to the Grain Stocks and Planted Acreage numbers released at the end of the old ballgame, on March 31. 

Corn futures closed 2% higher this week, the highest front month weekly close since September. Weekly corn export sales slowed to 998,500 MT, but were still seen as positive because export commitments have now reached 100% of the US forecast for the entire year.  Daily average ethanol production rose to 922,000 bpd last week, and ethanol stocks rose by 200,000 barrels amidst very high cash ethanol prices. Imports did start to arrive, with 11,000 bpd coming into the East Coast for the first time in 26 weeks. US ethanol prices had rallied enough to make imports competitive, and rail snafus continue to hinder US ethanol movement. The CFTC Commitment of Traders report on Friday afternoon confirmed that spec fund buying continues. The Managed Money reporting category added another 36,549 contracts to their net long, which reached 275,836 contracts as of April 1.

Soybean futures were up 2.6% this week, aided by a 2.3% advance in soybean meal and a 2.7% jump in soy oil. The $1 blend credit for soy oil use in biodiesel was included in Senate discussion of a tax extenders bill, but the bill is given slim chance of passing the House in its current form. Old crop beans got a boost because March 1 stocks stayed below 1 billion bushels, and were the tightest in 10 years. New crop saw record projected acreage at 81.5 million, but November futures rallied along with the old crop. Weekly US soybean export sales slowed to a paltry 85,500 MT, with only 19,300 MT of new crop booked. Total US export Commitments for 2013/14 are now at 107% of the USDA forecast for the year. As of the close on this past Tuesday, CFTC shows managed money accounts adding a few longs vs. the previous week. Their net long grew 8,071 contracts bringing their overall net long position to 193,446 contracts.

 

 

4/4/2014

           

 

Commodity

 

 

 

 

Weekly

Weekly

Month

03/14/14

03/21/14

03/28/14

04/04/14

Change

% Change

May

Corn

$4.86

$4.79

$4.92

$5.02

$0.10

1.98%

May

CBOT Wheat

$6.87

$6.93

$6.96

$6.70

($0.26)

-3.70%

May

KCBT Wheat

$7.52

$7.71

$7.64

$7.34

($0.30)

-3.93%

May

MGEX Wheat

$7.34

$7.43

$7.40

$7.22

($0.19)

-2.50%

May

Soybeans

$13.89

$14.09

$14.37

$14.74

$0.37

2.59%

May

Soybean Meal

$444.00

$455.90

$468.40

$479.10

$10.70

2.28%

May

Soybean Oil

$42.29

$41.02

$40.48

$41.57

$1.09

2.69%

April

Live Cattle

$145.25

$144.00

$146.50

$143.05

($3.45)

-2.35%

Apr

Feeder Cattle

$177.25

$175.28

$178.35

$177.70

($0.65)

-0.36%

April

Lean Hogs

$119.30

$125.68

$125.58

$123.15

($2.43)

-1.93%

May

Cotton

$92.19

$93.31

$93.74

$92.40

($1.34)

-1.43%

May

Oats

$4.44

$4.15

$4.02

$4.11

$0.09

2.18%

May

Rice

$15.36

$15.43

$15.51

$15.76

$0.25

1.61%

 

Wheat futures were sharply lower. Chicago was down 3.7%, KC slipped 3.9% and the MPLS May contract was off 2.5%. Weekly wheat export sales reported this week were 646,900 MT, down from 728,000 MT the previous week. That encouraged the already aggressive bears. USDA wheat stocks were about as expected, at 1.06 billion bushels. Planting intentions were a little smaller than expected at 55.8 million, but some spotty rains helped improve HRW prospects and settled some of the dust storms that had been making the news. The EU approved another 506,000 MT of wheat for export, taking the total to 23.3 MMT. As of the close on March 25, managed money accounts were still expanding their new net long in CBT wheat to 45,025 contracts. The big spec funds were already net long and expanded that position to 45,709 contracts in KC wheat.

Cotton futures were down 1.4% this week. USDA put weekly export sales for cotton last week at 120,000 RB, o f which 114,200 RB was upland and 5,500 RB was pima.   Total commitments as % of total exports are now at 92% compared to 91% last year and the 5 year average of 96%. The weekly Commitment of Traders report showed managed money accounts paring back their net long position by 4,711 contracts, a few more than they added the week before. That left the net position at 63,305 long.

Cattle futures were down 2.4% this week. Cash cattle traded at $148 in the south, down $2 from the previous week. The CME is still at a big discount to that level of cash prices, with first notice day for April futures on Monday. We would expect zero deliveries. Wholesale prices continued to retreat from the March 18 high. Choice boxes were down 2.4% this week, while Select dropped 4.4%. Weekly estimated slaughter at 583,000 head was down 2,000 from last week and 14,000 below year ago. Beef production YTD is down 5.9% from last year. USDA weekly beef export sales totaled 13,800 MT, up slightly from 13,300 MT the prior week and showing little price rationing damage.  

 

April Lean Hog futures lost 1.9% this week following the bearish Hogs & Pigs report. April futures were supported by their discount to the CME Lean Hog Index, and the need to converge with that Index on April 14. Summer futures were down $8.80 in the June contract for the week, as the H&P report showed more hogs would be available this summer than the market had been trading. Estimated weekly slaughter was 2.03 million head, down 3,000 head from the previous week. That was down 3.2% from the same week in 2013 and thus supportive to nearby pork prices. Carcass weights were up 6# from last year, which meant pork production for the week was down only 0.4% despite the light run. The pork carcass cutout lost 0.25% this week, with half of the primal rising and half of them declining. USDA weekly export sales for pork were stronger than expected at 13,800 MT vs. 6,600 MT the previous week.

 

Market Watch

 

Cattle traders will begin the week reacting to any surprise positions from the April cattle options expiration on Friday. Grain traders will get the usual USDA Export Inspections report on Monday morning at 10 am CDT and weekly USDA Export Sales report on Thursday morning. USDA will issued Crop Production and Supply/Demand reports on Wednesday morning, with some "known" changes stemming from the March 31 Grain Stocks reports.

 

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 2014 Brugler Marketing & Management, LLC

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