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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.

Keep on Truckin

Sep 17, 2010

 brulogomed

Market Watch

September 17, 2010

Keep on Truckin’

 The impact of last weeks USDA supply demand report kept the corn rocket ignited and despite a less than expected weekly export sales number corn closed 35 cents higher for the week. Weekly export sales were down 88% from the previous week attributed to the roll of the next marketing year sales to the current marketing year and so to put it in perspective sales at 584,241 MT were average for what the market has been doing since right before the June crop report. China has been a return customer after being absent from the corn market for a few years and purchased 1,157,500 MT in the 2009/10 marketing year. Corn closed above the $5.00 mark for the first time since September of 2008. Corn has rallied $1.88 since the June 30th crop report after consolidating for a year and half between $2.90 and $4.50.  

 Wheat ended the week with a 17 to 20 cent jump to day but with only small gain in Chicago, KC and MPLS for the week. The US really doesn’t have much soft wheat to export, and the hard wheats are seeing what USDA believes could be record buying interest. Egypt was in the market for wheat this week and purchased 55,000 MT of Soft White Winter from the US a bit disappointing to the trade considering the tender was for 295,000 MT. The balance of that tender was filled by
France and Canada. Export sales fell behind last weeks big surge at 484,600 MT. Egypt decreased their 2010/11 commitment by 263,700 MT and decreased their 2011/12 commitment by 110,000 MT for the week ending September 9th. There was no new news on the Russian wheat ban so the policy remains "a wait and see what we get" before making any further export decisions.

Opposite from last week Soybeans were double digits higher on Friday, resulting in a net gain of 38 cents for the week. Although, not a new high for the weekly charts, this was the highest price November soybeans have traded at since October of 2008. A 2010 crop that has increased in size has pushed the soybean market into consolidation since early August with price and supply juggling for balance in the last six week trading range; until today. Weather forecasters are keeping a watchful eye on the waning El Nino and developing La Nina and how those weather anomalies might impact the Argentine and Brazilian soybean production in 2010/11. The world demand for soybeans and soybean products has been on the rise with the developing populace wanting to add more animal protein to their diet creating an increased need for feed.  Export sales this week were 668,600 MT with China showing back up in a big way after being on the down low the last month. China took 339,700 MT of this week’s reported sales. 

Cotton futures posted 15 year highs on front month contracts, and are creeping on their contract highs. The week started out with follow through buying from last Friday’s WASDE report, a sharply higher dollar and weather concerns in Southern and Eastern Asia which comprises most of the world cotton. India delayed exports 2 weeks to Oct 1st. The week finished off strong with a total increase of 7.42%, which was only rivaled by corn but cotton still won that match. Strong export sales and on call mill buying pushed cotton up even further.

Hogs ended up flat after bouncing around a bit. Pork exports for July were reported down from June and in line with last year’s behavior. Analysts are expecting a reduction in numbers of 2.5% on the Hogs and Pigs report based on hog slaughter supplies since the June report. Fund buying helped to support hogs while cash prices did not. Russia limiting pork imports from two US plants had some impact on price but another could be the recent change in policy for the Japanese currency.

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

 

Commodity

 

 

 

 

Weekly

Weekly

Month

08/27/10

09/03/10

09/10/10

09/17/10

Change

% Change

Dec

Corn

$4.36

$4.65

$4.78

$5.13

0.35

7.32%

Dec

CBOT Wheat

$6.95

$7.41

$7.37

$7.39

0.03

0.34%

Dec

KCBT Wheat

$7.14

$7.58

$7.59

$7.68

0.09

1.19%

Dec

MGEX Wheat

$7.13

$7.58

$7.57

$7.73

0.16

2.15%

Nov

Soybeans

$10.27

$10.35

$10.31

$10.69

0.38

3.69%

Oct

Soybean Meal

$299.10

$301.50

$291.25

$304.70

13.45

4.62%

Oct

Soybean Oil

$40.39

$40.47

$41.36

$41.91

0.55

1.33%

Oct

Live Cattle

$98.10

$94.45

$97.15

$99.40

2.25

2.32%

Sep

Feeder Cattle

$116.27

$114.17

$111.70

$111.82

0.12

0.11%

Oct

Lean Hogs

$74.82

$77.20

$77.25

$77.70

0.45

0.58%

Oct

Cotton

$89.03

$90.95

$90.87

$97.61

6.74

7.42%

Dec

Oats

$2.79

$2.95

$3.24

$3.56

0.32

9.88%

Nov

Rice

$11.49

$11.72

$11.79

$12.08

0.29

2.46%

 

Cattle futures ended up higher for the week after being mixed. The cattle on feed report came in with Cattle on feed as of Sept 1 at 103% of last year which was well above estimates, fed cattle marketed at 107%, and placed on feed during August 107%, well above estimates. This is likely because of the high prices cattle continue to get. It should put pressure on the supply side of the equation if all of those extra placed cattle make it to market. Packers paid steady to $1 higher for cash cattle yesterday. Prices are said to be held up right now on the idea that there will be fewer cattle in feedlots next year due to feed costs.

Looking for professional help with your marketing decisions? Consider subscribing to our daily Ag Marketing Professional service or Special Research Reports. Call our office for details at 402-697-3623, or visit www.bruglermarketing.com.

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Market Watch:  We’ll start next week off with the winding down of Crop Progress reports and continue the week with Energy Stocks reports, the Cold Storage report, Census Crush, Census Cotton Consumption and Stocks and wrap up the week the quarterly Hog and Pig report on Friday.

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