Sep 3, 2014
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September 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.

Wild Card

Sep 27, 2013

 Brugler

Market Watch with Alan Brugler

September 27, 2013

Wild Card 

The baseball season is coming down to the last week, with several teams still in contention for the wild card playoff slots. There is tension, excitement, and the potential for your favorite team to make a run deep into the post season. For the grain markets the harvest season is just ramping up. The Grain Stocks and Small Grains reports on Monday are the equivalent of the wild card slots.  The market might get there by default (the other team losing) or with a walk off homer (USDA stocks or production WAY below trade estimates). And, of course you get the league championship series’ followed by the World Series in baseball. For the grains, we go on to the USDA October 11 Crop Production and WASDE reports, with USDA expected to bring updated Prevented Planting and FSA acreage data out of the bullpen.  

December corn futures were up 3 cents on the week, bumping along near the August low while awaiting USDA production data on the 11th.  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?" The Commitment of Traders report on Friday showed the Managed Money added 22,134 new short positions, taking their net short position to 126,345 contracts as of September 24 (631 million bushels). US ethanol production slowed this past week. Imports jumped to 43,000 bpa, but ethanol stocks dropped to the lowest level since June.

November futures eked out a 4 cent gain for the week after losing 66 cents per bushel the previous week. The expected poor yield reports are being offset by others that are much better than expected, diluting the bears’ certainty that the US average yield is below 41 bpa. Weekly export sales were strong at over 2.8 million metric tonnes. Much of this business was a broad contract signed publicly by Chinese companies here in a trade delegation. Thus, we didn’t get the big bullish reaction when USDA released the numbers. The latest Commitment of Traders data showed managed money spec funds trimming 12,499 contracts from their net long position in soybeans, taking it to 135,252 contracts as of September 24.

Wheat futures broke out above chart resistance and took off. Chicago was up 5.7% this week in nearby December futures. KC was up 5.3% and MPLS rose 4.6%.  US export sales continue to be well ahead of the most recent years, with 59% of the USDA forecast for the year already on the books or shipped out. Japan has been a steady buyer, along with China. The trade average guess for All Wheat production in the September 30 report is 2.108 billion bushels. September 1 stocks, which combine production, carryover and first quarter use, are expected to be 1.91 billion bushels, with several estimates below the 1.9 billion mark. Spec funds trimmed their net short position in Chicago wheat by about 25% in the week ending September 24. They are net long in KC.

Cotton futures rallied 2.8% this week, posting the highest Friday close of the month. USDA reported net weekly export sales through September 17 totaled 66,500 RB of upland cotton and 20,900 RB of pima. There were 9,900 bales sold for 2014/15.  The large spec funds added 1,460 contracts to their net long position in cotton during the reporting week ending September 24. Harvest continues to run a little behind normal, 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.

 

 

Commodity

 

 

 

 

Weekly

Weekly

Month

09/06/13

09/13/13

09/20/13

09/27/13

Change

% Change

Dec

Corn

$4.68

$4.59

$4.51

$4.54

$0.03

0.67%

Dec

CBOT Wheat

$6.48

$6.42

$6.46

$6.83

$0.37

5.69%

Dec

KCBT Wheat

$6.955

$6.915

$6.928

$7.318

$0.39

5.63%

Dec

MGEX Wheat

$7.13

$7.06

$6.99

$7.32

$0.32

4.61%

Nov

Soybeans

$13.68

$13.82

$13.15

$13.20

$0.04

0.34%

Oct

Soybean Meal

$434.70

$444.60

$413.40

$419.90

$6.50

1.57%

Oct

Soybean Oil

$43.43

$42.34

$42.09

$41.51

($0.58)

-1.38%

Oct

Live Cattle

$125.68

$125.25

$125.95

$128.25

$2.30

1.83%

Oct

Feeder Cattle

$158.02

$159.27

$160.22

$164.13

$3.91

2.44%

Oct

Lean Hogs

$90.90

$90.70

$90.05

$92.93

$2.88

3.19%

Oct

Cotton

$83.24

$85.21

$83.33

$85.66

$2.33

2.80%

Dec

Oats

$3.20

$3.12

$3.09

$3.17

$0.08

2.59%

Nov

Rice

$15.41

$15.42

$15.55

$15.40

($0.15)

-0.93%

 

Cattle futures rallied 1.83% this week. Beef production this week was 0.3% smaller than the previous week, and down 2.5% from the same week in 2012. Production year to date is down 0.9%. Weekly slaughter was 2.6% smaller than in 2012 with estimated carcass weights within a pound per animal of last year’s 798#. Wholesale beef prices were slightly higher this week despite weaker export sales (9,300 MT). Choice boxes were weaker on Friday but up 0.1% for the week. Select boxes were up 0.1% on a Friday/Friday basis. Cash cattle trade on Friday was mostly $2 higher than last week at $126+, with northern trade up $4 at $200.

Hog futures rose 3.2% this week. The estimated weekly slaughter was off 5.7% from the same period a year ago.  Runs in late August and September were unusually large a year ago, but the drop off has still caught the attention of end users. Pork production for the year is down 1.1%. The pork carcass cutout value gained 1.8% this week. Estimated week to date slaughter (including Saturday’s estimates) came in at 2.19 million head vs. 2.341 million a year ago this week. Weekly US pork export sales through September 17 totaled 9,500 MT. The reported data has been running around 30% of the actual total pork exports released by Census a couple months later.

The USDA Hogs & Pigs report was released after the close on Friday.  It showed more market hogs than expected at 100.3%, and fewer sows (although still showing slight expansion) at 100.4% of year ago. The All Hogs number is up 0.3% from year ago. 

Market Watch

Hog traders will begin the week reacting to the quarterly Hogs & Pigs report results from Friday night. Grain traders won’t be able to ease into their Monday, with the USDA Grain Stocks and Small Grains reports due out at 11 am CDT. The regular Monday USDA reports (Export Inspections and Crop Progress) will be of interest, particularly the rate at which the crops are maturing and being harvested. Monday also marks the end of the month and end of the 3rd quarter and the end of the federal fiscal year in the United States. There will be money sloshing around. Weekly ethanol production and stocks will be out on Wednesday. USDA weekly Export Sales will be released on Thursday. October cattle options will 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

Fed Throws a Curve Ball

Sep 20, 2013

 Brugler

Market Watch with Alan Brugler

September 20, 2013

Fed Throws Curve Ball 

Perhaps fitting for the end of the baseball season (and a tight race for the AL wild card slots), the FOMC threw the financial markets a curve ball on Wednesday. After months of hinting about a cutback in the easy money QE3 program (due to improving employment, auto and housing data) the Fed at the last moment decided to keep spiking the economic punch bowl and creating $85 billion per month in new money via the QE3 program and its buying of MBS and Treasury instruments. The initial market reaction was euphoric and inflationary, with gold and crude oil sharply higher and the stock market punching out new highs despite being badly overbought ahead of the Fed announcement. By Thursday and Friday, some apparently had stopped drinking and were suffering a hangover while stranded on base. After all, if the Fed thought it necessary to remain stimulatory, maybe the economy isn’t doing so well? For the commodity markets, it was mostly a case of good news (cheap dollar, easy money) failing to make prices go higher.

December corn futures lost 8 cents on the week. The trade, particularly the spec funds, continues to be bearish because of large anecdotal yield reports and some rainfall this week that should help the later maturing areas. The Commitment of Traders report on Friday showed the Managed Money added 39,525 new short positions, taking their net short position back above 100,000 contracts (521 million bushels). US ethanol production slowed this past week, as did imports, with ethanol stocks down 100,000 barrels. Chicken producers continue to expand, with egg sets up 5% and chick placements up 3%. This implies stronger domestic feed use from that sector. The overall stocks/use picture is still up in the air. The real tests will come with the Grain Stocks report on the 30th (tells us whether 661 million old crop carryover is accurate) and the acreage revisions in October (assumed to be lower due to additional Prevented Planting acres).

November futures lost 66 cents per bushel after gaining 14 cents the previous week. There were a variety of factors at work, including improved moisture for some areas, extended above normal temps that are shrinking frost/freeze risk, and expanded South American planting intentions. Technically, the failure to go up on bullish news triggered some profit taking selling, and closing the November chart (drought) gap chased other bulls out the door on Thursday and Friday. Weekly export sales were strong at 923,300 MT. The latest Commitment of Traders data showed managed money spec funds adding 1,818 contracts to their net long position in soybeans, now at 147,751 contracts as of September 17. Some of them clearly were leaving later in the week.

Wheat futures were lower in Minneapolis, but held on to small gains in Chicago and KC after a midweek rally evaporated going into the weekend. US export sales continue to be well ahead of the most recent years, with 57% of the USDA forecast for the year already on the books or shipped out. Japan has been a steady buyer, along with China. US production was not changed on September 12, but could be modified in the Small Grains report on September 30. A private forecaster in Memphis put projected winter wheat production at 1.541 billion bushels vs. the USDA September figure of 1.543 billion.

Cotton futures lost 2.2% this week. Weekly export sales of Upland cotton were 103,100 running bales last week, and net American Pima sales were 8,000 RB.  The large spec funds added 2,224 contracts to their net long position in cotton during the reporting week ending September 17. Crop development continues to run a little behind normal, 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.

 

 

Commodity

 

 

 

 

Weekly

Weekly

Month

08/30/13

09/06/13

09/13/13

9/120/2013

Change

% Change

Dec

Corn

$4.82

$4.68

$4.59

$4.51

($0.08)

-1.80%

Dec

CBOT Wheat

$6.54

$6.48

$6.42

$6.46

$0.05

0.74%

Dec

KCBT Wheat

$7.035

$6.955

$6.915

$6.928

$0.01

0.18%

Dec

MGEX Wheat

$7.25

$7.13

$7.06

$6.99

($0.07)

-0.96%

Nov

Soybeans

$13.58

$13.68

$13.82

$13.15

($0.66)

-4.80%

Oct

Soybean Meal

$428.40

$434.70

$444.60

$413.40

($31.20)

-7.02%

Oct

Soybean Oil

$43.97

$43.43

$42.34

$42.09

($0.25)

-0.59%

Oct

Live Cattle

$126.80

$125.68

$125.25

$125.95

$0.70

0.56%

Sept

Feeder Cattle

$156.93

$156.58

$157.30

$157.10

($0.20)

-0.13%

Oct

Lean Hogs

$87.63

$90.90

$90.70

$90.05

($0.65)

-0.72%

Oct

Cotton

$83.70

$83.24

$85.21

$83.33

($1.88)

-2.21%

Dec

Oats

$3.41

$3.20

$3.12

$3.09

($0.03)

-1.11%

Nov

Rice

$15.75

$15.41

$15.42

$15.55

$0.13

0.81%

 

Cattle futures rallied 0.56% this week. Beef production this week was 3.8 larger than the previous week, and up 1.3% from the same week in 2012. Production year to date is down 0.8%. Weekly slaughter was 1.1% larger than in 2012 with estimated carcass weights within a pound per animal of last year’s 799#. Wholesale beef prices were lower this week despite the strong export sales (16,800 MT). Choice boxes dropped off 0.2% and Select boxes were down 0.4% on a Friday/Friday basis. Cash cattle trade on Friday was mostly $1 higher than last week at $124, with northern trade slow to develop in the $195-196 range. The USDA Cattle on Feed report was released after the close on Friday, and showed the smallest September 1 number on feed since 2003. On feed was only 92.76% of year ago, reinforcing ideas of tighter fourth quarter beef supplies.

Hog futures lost 0.72% to add to the 0.22% drop the previous week. The estimated weekly slaughter was off 9.2% from the same period a year ago.  Runs in late August and September were unusually large a year ago, but the drop off has still caught the attention of end users. Pork production for the year is down 0.9%. The pork carcass cutout value gained 2.14% this week following a 2.85% gain the previous week. The USDA weekly export sales report increased to 11,200 MT from 7,331 MT the previous week. Estimated week to date slaughter (including Saturday’s estimates) came in at 2.180 million head vs. 2.402 million a year ago this week.

Market Watch

Cattle traders will begin the week reacting to the COF results from Friday night. Grain traders will be dealing with any surprise futures positions resulting from October options expiration. This will a lull week in the grain news flow, peaking again with the Grain Stocks report on the 30th.   The regular Monday USDA reports (Export Inspections and Crop Progress) will be of interest, particularly the rate at which the crops are maturing and being harvested. Weekly ethanol production and stocks will be out on Wednesday. USDA weekly Export Sales will be released on Thursday. The monthly USDA Cold Storage report will be out on Monday afternoon. The big quarterly Hogs & Pigs report will be released on Friday evening after the market close.

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

Friday Market Watch with Alan Brugler

Sep 13, 2013

Brugler 

Market Watch with Alan Brugler

September 14, 2013

 

September corn futures dove off the board today, losing 29 cents on the day and finishing at round number support of $4.50 per bushel.  December futures lost 9 ¼ cents on the week, and are now sitting 13¼ cents above the lowest price the Dec13 contract has seen since September of 2010.  The trade, particularly the spec funds, continues to be bearish but suspects that some yield has been lost to the drought conditions in the WCB. Offsetting that concern, the above normal heat in the Midwest and West is lessening the risk of an early freeze. The Commitment of Traders report on Friday showed the Managed Money added just 180 contracts to their net short position, which is now 64,686 contracts as of September 10. US ethanol production jumped sharply last week, but imports were smaller and ethanol stocks were up only 100,000 barrels. Stocks built up on the West Coast, but were drawn down in the Midwest due to a number of plants still taking pre-harvest down time. USDA provided a bearish input on Thursday with the 155.3 bushel national average yield projection and the 13.843 billion bushel crop estimate. Projected ending stocks rose to 1.855 billion bushels when the trade had been leaning smaller. They also provided a bullish input with a cut in estimated old crop stocks to 661 million bushels. The real tests will come with the Grain Stocks report on the 30th (tells us whether 661 million is accurate) and the acreage revisions in October (assumed to be lower due to additional Prevented Planting acres).

 

September Soybean futures expired with some fireworks, closing 46¾ cents higher on the day after being as much as 57½ cents higher than that during the session. November futures were up 14 cents for the week after gaining 37¾ cents on Thursday following the USDA reports. A Bloomberg survey showed an average estimate of 41.2 bushels per acre for US yield, and that is what USDA showed on Thursday. Old crop stocks were left UNCH, while new crop was trimmed to 150 million bushels. The average cash price estimate for the year jumped a dollar per bushel due to the price rationing needed to keep those ending stocks above pipeline levels. USDA did hike expected Brazilian production by another 3 MMT for 2014, due to the planting incentives created by the rally to $14 in November beans. The latest Commitment of Traders data reported today as of Tuesday Sept 10th showed managed money decreased their net long position in soybeans by 13,505 contracts bringing their total net long position to 145,933 contracts.

 

Wheat futures were lower on the week with the September contracts expiring today.  KC HRW was down 23 ½ cents for the week, losing 21¾ cents of that today.  The Chicago wheat September contract lost 14 cents on the day, but finished the week only 7¼ cents lower.  Minneapolis wheat saw the least damage to the September contract, losing only 2 ½ cents on the week and just a ¼ cent today.   Export sales continue to be well ahead of the most recent years, with 54.6% of the USDA forecast for the year already on the books or shipped out. Egypt bought Russian and Romanian wheat to extend coverage to mid-November. The US was not competitive due to higher freight costs. USDA showed larger expected world ending stocks for 2014 (176.3 MMT) after boosting Canadian production another 2 MMT.  US production was not changed on Thursday, but could be modified in the Small Grains report on September 30. The latest Commitment of Traders data for the reporting period between Sept 3rd – Sept 10th showed managed money increased their net short position in Chicago wheat by 8,618 contracts bringing their total net short position to 47,008 contracts.

 

Cotton futures traded at the highest levels in the October contract since August 21st during the last two sessions of the week.  Weekly export sales of Upland cotton were 134,400 running bales last week, and net American Pima sales were 16,000 RB.  Another 19,800 running bales of Upland cotton were purchased by Turkey for the 2014/15 marketing year. The large spec funds liquidated another 6,299 positions bringing their total net long position to 40,548 contracts according to the Friday afternoon CFTC commitment of traders report. December futures traded at their highest price since August 26th before closing 69 points lower than the high tick on Friday. USDA raised projected US old crop ending stocks to 3.9 million bales and cut projected new crop exports. That increased expected 2014 US stocks to 2.9 million bales. World ending stocks were also hiked for 2014 to a record 94.73 million bales. That is a stocks/use ratio of 86.4%, or 315 days at the current rate of use. Over 61% of that cotton would be held within China. China is rumored to be restructuring their price support program because it has resulted in larger than desired stocks accumulation. 

 

 

Commodity

 

 

 

 

Weekly

Weekly

Month

08/23/13

08/30/13

09/06/13

09/12/13

Change

% Change

Dec

Corn

$4.70

$4.82

$4.68

$4.59

($0.09)

-1.92%

Dec

CBOT Wheat

$6.46

$6.54

$6.48

$6.42

($0.06)

-0.96%

Dec

KCBT Wheat

$6.973

$7.035

$6.955

$6.915

($0.04)

-0.58%

Dec

MGEX Wheat

$7.38

$7.25

$7.13

$7.06

($0.07)

-0.95%

Nov

Soybeans

$13.28

$13.58

$13.68

$13.82

$0.14

1.01%

Oct

Soybean Meal

$421.00

$428.40

$434.70

$444.60

$9.90

2.28%

Oct

Soybean Oil

$42.72

$43.97

$43.43

$42.34

($1.09)

-2.51%

Oct

Live Cattle

$126.70

$126.80

$125.68

$125.25

($0.42)

-0.34%

Sept

Feeder Cattle

$156.65

$156.93

$156.58

$157.30

$0.72

0.46%

Oct

Lean Hogs

$85.10

$87.63

$90.90

$90.70

($0.20)

-0.22%

Oct

Cotton

$84.24

$83.70

$83.24

$85.21

$1.97

2.37%

Dec

Oats

$3.32

$3.41

$3.20

$3.12

($0.07)

-2.28%

Nov

Rice

$15.58

$15.75

$15.41

$15.42

$0.01

0.06%

 

Cattle futures fell back 0.34% this week after a small loss the previous week. Beef production this week was 7.2% larger than the Labor Day week, but 5.8% smaller than the same week in 2012. Production year to date is down 0.9%. Weekly slaughter was 6.0% smaller than in 2012 with carcass weights continuing to run about 3 pounds higher than last year. Wholesale beef prices were lower this week despite the strong export sales and reduced slaughter, with Choice losing 1.3% and Select down 2.5% on a Friday/Friday basis. Cash cattle trade on Thursday $123, equal to the previous week. Feedlots were asking $124 for the rest. The latest Commitment of Traders data for the reporting period between Sept 3rd – Sept 10th showed managed money decreased their net long position in live cattle by 18,492 contracts bringing their total net long position to 39,342 contracts.

 

Hog futures lost 0.22% this week, falling back a bit from the strong rally from the previous two weeks. The estimated weekly slaughter was off more than 10% from the same period a year ago.  The pork carcass cutout value gained 2.85% on the week.  The belly primal was another 7.97% higher this week, and loins gained 4.77%. The USDA weekly export sales report showed another 7,331 MT booked, which is slightly below the weekly average for the month of August, and well above the weekly average for July.  The latest Commitment of Traders data for the reporting period between Sept 3rd – Sept 10th showed managed money increased their net long position in lean hogs by 11,688 contracts bringing their total net long position to 90,496 contracts. Estimated week to date slaughter (including Saturday’s estimates) came in at 2,172,000 head compared to 2,427,000 head for the same period last year.

 

Market Watch

 

This will be a little bit quieter week for the grain trade, now that we are past the Crop Production report. It will be kind of a lull in the grain news flow, peaking again with the Grain Stocks report on the 30th.   The regular Monday USDA reports (Export Inspections and Crop Progress) will be of interest, particularly the rate at which the crops are maturing. Traders are expecting further small declines in the % of the corn and soybean crop rated good or excellent. Weekly ethanol production and stocks will be out on Wednesday. USDA weekly Export Sales will be released on Thursday. There will still be some other reports out. The much awaited Federal Reserve meeting will be Tuesday and Wednesday, with potential rippled effects. The USDA Cattle on Feed report will be out on Friday afternoon. Friday will also mark the expiration of October grain options.

 

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

Multiple Forks In the Road

Sep 06, 2013

 Brugler

Market Watch with Alan Brugler

September 6, 2013

Multiple Forks in the Road

 

Two roads diverged in a yellow wood,
And sorry I could not travel both
And be one traveler, long I stood
And looked down one as far as I could
To where it bent in the undergrowth;

Robert Frost, The Road Not Taken, 1916

Like Robert Frost in his poem, many futures and equity markets approached forks in the road after Labor Day. For some it was Syrian intervention vs. Fed tapering, or strong exports vs. rising production potential. For others it was high heat speeding maturity vs. erratic rainfall on still developing corn and soybean crops. Many paused and tried to look down both paths, but lacked technical or fundamental triggers to force the decision. USDA is likely to give the grain markets a nudge on Thursday with the mid-morning revisions to estimated yields and production for US crops.

September corn futures were 4 cents lower for the week, with zero deliveries against the contract. December futures were down 13 ¼, totally erasing the rally from the week before. The trade, particularly the spec funds, continues to be bearish but suspects that some yield has been lost to the drought conditions in the WCB. Offsetting that concern, the above normal heat in the Midwest and West is lessening the risk of an early freeze. The Commitment of Traders report on Friday showed the Managed Money category re-entering 7,078 shorts after a big exodus the previous week. They boosted their net short to 64,506 contracts as of September 3. US ethanol production was down 1,000 bpd from last week, and stocks were down 100,000 barrels. Imports jumped to 31,000 bpd but were absorbed by the market.  Weekly corn export sales were negative for old crop due to cancellations and rollovers totaling 113,200 MT. Cumulative new crop exports heading into the new marketing year are historically large, but were only 328,300 MT this past week.

Soybeans gained 13 cents per bushels this week in the September contract after a 59 cent pop the previous week. New crop November futures were up 29 ½ cents after gaining more than 60 cents on Monday. Hot and dry weather in the Corn Belt is thought to be taking away yield potential, with a parade of firms lowering their expected national average yields to 40.8-42.5 bushels per acre. Memphis based Informa projected a 42.4 bpa yield on Friday. A Bloomberg survey found an average estimate of 41.2 bushels per acre. US weekly export sales totaled 849,200 MT. Given the record production in Brazil, US new crop export sales commitments are impressive and back up USDA’s assumption of larger Chinese purchases in 2013/14. Brazil has shipped 1.16 billion bushels since February 1, nearly matching their 12 month total from last year. 2012/13 shipments using the USDA marketing year have been 34.74 MMT to date. The USDA projection for 2012/13 is 39.2 MMT and 41.5 MMT for 2013/14.

Wheat futures were mixed, with KC HRW up 1.1% while the other two classes were down 1.3%. Wheat export sales continue to be excellent, with 53% of the USDA forecast for the year already on the books or shipped out. The 5 year average for this date would be 46%. Weekly sales were 747,400 MT compared to 551,300 MT the previous week. Egypt bought Russian and Ukrainian wheat to extend coverage to November 1. The US was not competitive due to higher freight costs.

Cotton futures ground to multi-month lows and lost 0.55% for the week in nearby October futures. Weekly export sales improved to 173,300 running bales last week, of which 163,300 RB were upland cotton. The large spec funds liquidated 11,871 long positions in the reporting week ending September 3. They were still net long 46,847 contracts in cotton according to the Friday afternoon CFTC Disag report. December futures traded at their lowest price since June before rebounding on Friday.

 

 

Commodity

 

 

 

 

Weekly

Weekly

Month

08/16/13

08/23/13

08/30/13

09/06/13

Change

% Change

Sep

Corn

$4.74

$4.96

$4.95

$4.92

($0.04)

-0.71%

Sep

CBOT Wheat

$6.31

$6.35

$6.43

$6.35

($0.08)

-1.28%

Sep

KCBT Wheat

$6.983

$6.945

$7.008

$7.085

$0.08

1.11%

Sep

MGEX Wheat

$7.37

$7.18

$7.20

$7.11

($0.09)

-1.28%

Sep

Soybeans

$12.83

$13.65

$14.24

$14.37

$0.13

0.91%

Sep

Soybean Meal

$408.80

$433.20

$468.20

$482.10

$13.90

2.97%

Sep

Soybean Oil

$42.81

$42.64

$43.89

$43.36

($0.53)

-1.21%

Oct

Live Cattle

$127.92

$126.70

$126.80

$125.68

($1.13)

-0.89%

Sept

Feeder Cattle

$157.65

$156.65

$156.93

$156.58

($0.35)

-0.22%

Oct

Lean Hogs

$86.62

$85.10

$87.63

$90.90

$3.28

3.74%

Oct

Cotton

$93.40

$84.24

$83.70

$83.24

($0.46)

-0.55%

Sep

Oats

$3.78

$3.63

$3.92

$3.69

($0.23)

-5.87%

Sep

Rice

$15.56

$15.78

$15.81

$15.45

($0.35)

-2.25%

 

Cattle futures fell back 0.89% this week after a small loss the previous week. Beef production this week was 3.7% larger than the same Labor Day week in 2012, and production year to date is down 0.8%. Weekly slaughter was 3.3% larger than in 2012 with carcass weights continuing to run about 4 pounds higher than last year. USDA reported weekly beef export sales slowed to 17,900 MT from a blistering 23,200 MT the week before. Census monthly beef exports for July were released at the end of the week, and were the largest since July 2011. Wholesale beef prices were lower this week despite the strong export sales and reduced slaughter, with Choice down 0.2 and Select down 0.8% on a Friday/Friday basis. Cash cattle trade on Friday was $122-123, down $1-2 from last week. Northern trade was at $194-195 vs. early week ideas/hopes of $198.  

Hog futures rallied 3.74% this week, extending the rally from the previous week. The estimated weekly slaughter dropped to 1.97 million head because of the Labor Day holiday. That was down 10.9% from the previous week and down 4.7% from the elevated year ago levels. Pork production YTD is down only 0.4% from 2012 due to higher average carcass weights thus far in 2013. Current weights are now running about even with 2012 at an estimated 203 pounds. The pork carcass cutout value was up 0.51% after two down weeks. The belly primal was up 0.6% this week, but is still down 24% from its summer peak. The USDA weekly export sales report slowed to 4,600 MT after hitting 12,600 MT and 7,100 MT in the two preceding weeks.  

Market Watch

This will be a big week for the grain trade, with the monthly USDA Crop Production and Supply/Demand reports coming out midsession on Thursday. The regular Monday USDA reports (Export Inspections and Crop Progress) will be of interest, particularly the rate at which the crops are maturing. Traders are expecting further small declines in the % of the corn and soybean crop rated good or excellent. Weekly ethanol production and stocks will be out on Wednesday. USDA weekly Export Sales will be released on Thursday. September grain futures contracts expire on Friday the 13th.

Visit our Brugler web site at https://www.bruglermarketing.com 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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