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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.

Fuzzy White Bull

Feb 19, 2010
 

Market Watch with Alan Brugler
February 19, 2010
 
Fuzzy White Bull
 
March cotton was the clear bull leader (or boll leader if you will pardon the pun) for the second week in a row. Traders ignore the rally in the US dollar, and focused on tight projected 2009/10 ending stocks in the US, along with tightening world forecasts and some recovery in world demand. The weekly Export Sales report showed new upland and pima bookings of 373,400 running bales. At the Outlook Forum, USDA projected a rise to 10.5 million acres in 2010 for the US. Due to tight world supplies, cotton exports are seen rising to 12.6 million bales, with global cotton consumption also expanding by 2.6% as the world economy improves.
 
Corn gave back 2 of the 10 cents per bushel that it gained the previous week. Prices were up smartly on Tuesday after the President’s Day holiday, but retreated on Wednesday and Thursday due to skepticism about export prospects in a strong dollar environment. On Friday, USDA reported 974,600 MT of weekly export sales. At the Outlook Forum, USDA projected an 89 million acre US crop for 2010.
 
Wheat futures were higher at all three exchanges for the second week in a row. Chicago lost a penny to KC and MPLS in the nearby contracts. Wheat export sales were on the upper end of the trade estimates on Friday. Bookings for the week ending February 11 were 463,400 MT. The US lost the Egyptian buying tender again, with Egypt buying Russian and French wheat at prices below what the US can offer at current freight rates and FOB prices.
 
Soybean futures started off in promising fashion on Tuesday, but spent the rest of the week giving it back. They were net UNCH for the week. Weekly export sales slowed, with the world loading up on cheap Brazilian beans fresh out of the field and only buying enough US beans to ensure no disruptions in supply if there are strikes or weather problems in South America. Old crop sales were 203,600 MT, with a sparse 300 metric tonnes of 2010/11 beans sold to Japan. Export shipments were still going strong at 1.119 MMT.
 
Below is a table showing the net weekly changes and 4 week history of selected agricultural futures:
 
Market Watch
 
 
 
 
Weekly
Weekly
01/29/10
02/05/10
02/12/10
02/19/10
Change
% Change
March Corn
$3.57
$3.52
$3.62
$3.60
-0.02
-0.41%
March CBOT Wheat
$4.74
$4.73
$4.87
$4.90
0.03
0.67%
March KCBT Wheat
$4.87
$4.85
$4.95
$4.98
0.04
0.76%
March MGEX Wheat
$5.01
$5.03
$5.05
$5.09
0.04
0.79%
March Soybeans
$9.14
$9.14
$9.45
$9.45
0.00
0.00%
March Soybean Meal
$273.80
$271.00
$280.00
$276.40
-3.60
-1.29%
March Soybean Oil
$36.15
$37.00
$37.84
$38.52
0.68
1.80%
February Live Cattle
$85.80
$87.25
$89.37
$92.77
3.40
3.80%
March Feeder Cattle
$98.88
$98.33
$99.92
$102.55
2.63
2.63%
April Lean Hogs
$68.60
$66.72
$68.20
$69.65
1.45
2.13%
March Cotton
$69.03
$66.62
$74.39
$78.79
4.40
5.91%
March Oats
$2.28
$2.26
$2.37
$2.30
-0.07
-2.85%
March Rice
$14.20
$14.09
$14.26
$13.63
-0.63
-4.42%
 
Hogs were higher for the second week in a row, climbing out of the hole with the assistance of higher pork prices and solid export demand. All of the pork primal cuts except ribs were higher for the week. The carcass value of the hog as measured by USDA was up 4.2%% for the week, rising faster than the 2.13% gain in the April futures. Pork production for the year to date is down 7.9%, with this week’s estimated production down 3% from the same week in 2009.
 
Cattle futures advanced sharply this week, up $3.40 per hundred to add to last week’s $2.12 per hundred gain.  Beef production YTD is down an estimated 1.7%. When combined with a little better consumer interest that allows wholesale prices to rally. Choice boxed beef on Friday was quoted at $146.71, up 4% for the week. The Friday night USDA Cattle on Feed report showed continued shrinkage in the US feedlot population. On Feed numbers for February 1 were 97.35% of last year, and slightly above the average trade estimate. Placements during January were much larger than generally expected, but offset by active marketings during the month.
 
Market Watch: Livestock traders will start the week reacting to the Friday night Cattle on Feed report, and then take a glance at the Cold Storage report scheduled for release on Monday night. Corn traders may have a little position adjusting to do, with the “pin” of the 360 strike price on the expiration of the March options on Friday. Monday will also feature the regular weekly Grain Inspections report. On Thursday, Census will release the monthly Crush report, and also the Cotton Consumption report. Friday will be FND (First Notice Day) for March grain futures delivery notices. It will also be the last trading day for February cattle.

LOOKING FOR MORE INFORMATION? ATTEND THE BRUGLER MARKETING WINTER SEMINARS IN OMAHA, NE or DAYTON, OH. The Omaha meeting is Feb 23-24, and Dayton will be held March 1-2. Call the number below for details or visit the Brugler website at www.bruglermktg.com
 
There is a risk of loss in futures and options trading.  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, or of any particular risk management technique. 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 subscription and consulting services.
 
Copyright 2010 Brugler Marketing & Management, LLC
 
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COMMENTS (1 Comments)

Market Maker
Just got back from argentina, what a disaester. Water has taken 20% of crop. Kinda looks like the mississippi run amuck all over. Yield way down from projections.
10:37 AM Feb 21st
 

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