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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.

This Week Was All About Weather

Jun 19, 2009

 

           

 

Market Watch Summary with Alan Brugler

June 19, 2009

 

This Week Was All About Weather

 

July corn futures were 26 cents lower for the week.  By this Friday’s pit trading close NYMEX July crude oil futures were $2.49 lower per barrel compared to its previous Friday close.  Likewise, the US dollar index by the close of pit trading this Friday was a few points shy from the same time last Friday.  These two outside market factors for the week contributed to July corn futures to trade on both sides, but ended lower at Friday close.  Another contributing factor to corn future’s trading this week was weather and export sales.  Forecasts this week and the next called for periods of rain and warmer temperatures for the Corn Belt which are beneficial for crop development, but pressured corn futures.  Better than expected corn export sales reported this week was attributed to a weakening US dollar and higher-priced Indian supplies due to tightening stocks.

 

July soybean futures were 67 cents lower for the week.  July soymeal were $32.70 lower, and soy oil was 63 cents lower.  Like corn, lower crude oil futures and a weakening US dollar by week’s end led the soy complex to trade on both sides, but ended the week lower.  Unlike corn, weather forecasted for the Midwest this week and next was seen as helpful/bearish for the western half for crop development, but harmful/bullish for the eastern half due to further delaying plantings.  Lower cash market price changes in high protein soybean meal feed for the week weighed on soymeal futures.  Export sales this week for soybeans reflected trade sentiment that China’s demand for US soy exports have come to an end.

 

Wheat futures in Chicago, Kansas City and Minneapolis all ended the week lower compared to last week by 30, 22, and 34 cents, respectively.  This week the underlying pressure of US wheat futures was ample world wheat supply and slow US export demand, though a weakening US dollar was seen as supportive.  Weekly export sales reported came within trade expectations.  Weather forecasted this week was seen as bearish to wheat futures.  Warmer and drier conditions with some scattered showers didn’t hinder winter wheat harvest in the southern Plains.  Warmer temperatures with periods of rains in the northern Plains were seen as beneficial to spring wheat development.

 

Below is a table showing the net weekly changes and 4 week history of selected agricultural futures contracts:

 

Market Watch

 

 

 

 

Weekly

Weekly

 

05/29/09

06/05/09

06/12/09

06/19/09

Change

% Change

July Corn

$4.36

$4.44

$4.26

$3.99

-0.26

-6.17%

July CBOT Wheat

$6.37

$6.23

$5.85

$5.55

-0.30

-5.04%

July KCBT Wheat

$6.87

$6.75

$6.37

$6.15

-0.22

-3.49%

July MGEX Wheat

$7.72

$7.44

$7.33

$6.99

-0.34

-4.57%

July Soybeans

$11.84

$12.26

$12.46

$11.79

-0.67

-5.34%

July Soy Meal

$382.50

$396.00

$422.70

$390.00

-32.70

-7.74%

July Soy Oil

$39.05

$39.73

$37.16

$36.53

-0.63

-1.70%

June Live Cattle

$81.32

$80.15

$80.47

$80.92

0.45

0.56%

Aug Feeder Cattle

$101.75

$96.62

$97.57

$98.10

0.53

0.54%

July Lean Hogs

$65.63

$60.08

$59.80

$61.43

1.63

2.72%

July Cotton

$56.97

$55.11

$56.10

$51.56

-4.54

-8.09%

July Oats

$2.51

$2.56

$2.39

$2.12

-0.27

-11.11%

July Rice

$12.35

$12.62

$12.93

$12.30

-0.63

-4.84%

 

July cotton futures ended lower for the week.  Though a weakening US dollar index was seen as supportive, lower crude oil futures and lower US stock markets for the week weighed on cotton.  Outside markets this week again led the direction of cotton.  Weekly export sales reported came within trade estimates.  This week, the Cotlook/Far Eastern A Cotton Index  for June 17 and 18 was 60.35 cents which indicated Texas cotton was the cheapest in the world.  This week temperatures forecasted to exceed 100°F in the High Plains of Texas, which is where the majority of US cotton is grown, remains a concern due to potentially damage to cotton bolling.

 

The livestock complex settled on the positive side this week.  Live cattle futures closed up 45 cents for the week, feeder cattle contracts finished up 53 cents and lean hogs ended $1.63 higher.  Lower priced high protein soymeal and corn feed for the week lent support to feeder cattle and lean hogs.  Additional support to feeders came from steady to higher cash feeder markets for the week.  June live cattle contracts trading at a discount to the previous week’s cash cattle prices provided underlying support.  Recent strength during this week in Choice boxed beef cutout values was also seen as supportive to live cattle futures.  A steadier tone in the cash hog markets this week was supportive to futures.  Sharp price swings in pork cutout values this week on top of continuing concerns over the impact on pork demand due to the H1N1 “swine” flu situation overshadowed hog futures.  After the close of livestock trading the USDA reported cattle on feed by June 1 at 10.407 thousand head which was 96.23% compared to the previous year and fell below average trade estimates.  Cattle placements in May came in at 86.21% of the previous year which also fell below average trade estimates.  Cattle marketing during May came in at 91.21% which pretty much fell inline with trade estimates ranging 90 to 92.4 percent.

 

Market Watch:  On tap for the coming week is the weekly Crop Progress report and the monthly Cold Storage report on Monday.  Also next week the FOMC will hold its 2-day meeting on Tuesday & Wednesday.  On Thursday, the Census will release its monthly Oilseeds Crushing and Cotton Consumption reports.  On Friday, the USDA will release its quarterly Hogs & Pigs report.  Economic reports such as Jobless Claims, Personal Income, and GDP will be released throughout the week.

 

There is a risk of loss in futures and options trading.  Past performance is not necessarily indicative of future results.  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 more extensive paid content, or visit the web site @ www.bruglermktg.com.

 

© 2009 Brugler Marketing & Management, LLC

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COMMENTS (1 Comments)

Anonymous
hey alan 5.5 inches of rain this week we are rapidly approaching 30 inches since april 1 crop development 0 around here 50% of corn acres planted maybe in area and bean planting would be lucky to come in at 10% all were hoping for now is a really late frost. This year is far worse than last year covering a totally different area and a much larger area. I would guess 1-2 million acres in same shape, somewhere in the 5 million acres affected adversly. Just north of me 2 days of field work all year, there already going to the bank trying to work out loan repayment plans. That is about as bad as it gets. I was talkin to insurance adjuster the other day he says the numbers are way wrong. He says Indiana maybe 50% planted corn not 90+ as reported. Illinois acres way wrong also. He has been all over so i assume he has a pretty good handle on the real story, not the fiction printed around here.







11:22 AM Jun 20th
 

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