Dashing Through The Snow

Published on: 16:46PM Dec 27, 2013


Market Watch with Alan Brugler

December 27, 2013

Dashing Through the Snow


Our theme this week is appropriate to our audience in the east, which saw some winter weather this week. The line comes from the song Jingle Bells, which begins with "Dashing through the snow, on a one horse open sleigh", and in the second verse ends with the participants flipping over the sleigh in which they are riding after it hits a snow drift. Some of the ag markets had that high speed sliding aspect to them this week, with sharp moves in thin market conditions. Wheat has been in a snow drift so long that any would be bulls are frozen solid! 

March corn futures were down 6 cents this week, with all of the selling coming on Thursday. That drop offset 75% of the gain from the previous week. Demand is still strong as low prices continue to work to cure low prices. USDA reported larger than expected weekly corn export sales of over 1.9 MMT. China had rejected 545,000 metric tons (21 million bushels) of U.S. corn as of mid-December. The export sales report confirmed 418,900 MT of that had been re-directed to other buyers, with another 60,000 adjusted in the previous week report. Sales to other countries are still quite strong. US corn export commitments are 78% of the upwardly revised December USDA forecast for the year. The 5 year average commitment for this time would be 55%. Ethanol stocks did rise 100,000 barrels last week, and production dropped by about 2,000 barrels per day due to logistical issues.

Soybean futures were down 0.6% this week. Weekly US export sales were much improved at 788,300 MT. Total US export Commitments are now at 99% of the USDA forecast for the entire year, with more than 8 months remaining. Last year 84% of the sales for the year were booked at this time and that was a front loaded year like this one. Soybean meal export sales slowed, but 63% of the projected sales for the year are already booked. The average pace would be 55%. Brazilian producers are trying to hit the market inverse by artificially defoliating beans and getting the crop closer to harvest ready in some more advanced maturity areas. There is chatter about loading at least one or two vessels with new crop in mid-January. On the other hand, 15% of the acreage in Rio Grande do Sul has yet to be planted. That is also the case in the Northeastern states.

Wheat futures lost another 0.7 to 2.4% this week, but did manage a higher daily close on Friday in Chicago.  Total US export commitments are still a larger % of the USDA forecast than usual for this date, currently at 81% vs. the five year average of 75%.  Weekly wheat export sales through December 19 were similar to the previous week at 656,100 MT including 60,000 MT for 2014/15 shipment. Brazil continues to buy US wheat to offset missing Argentine supplies.

Cotton futures rose 1.17% this week. Projected US ending stocks are still an adequate 3 million bales. China is still seen holding more than half of the world surplus. Economic indicators have picked up in several areas, encouraging speculative fund buying. Weekly cotton export sales for the week ending December 19 increased from the previous week, with upland bookings at 242,300 running bales including 20,700 RB for 2014/15 shipment. Turkey was again the largest buyer, with China in second position. US Export commitments as a % of total exports (for upland cotton) are now at 73%, lagging the 5 year average of 75%. 


















% Change










CBOT Wheat








KCBT Wheat








MGEX Wheat
















Soybean Meal








Soybean Oil








Live Cattle








Feeder Cattle








Lean Hogs
































Cattle futures rallied another $1.32 this week to add on to gains from each of the previous two weeks. Feeders were up 0.1%. Cash cattle traded $4-6 higher on Friday than they had the previous week. Packers needed cattle and had to pay up to get the few that were available. Cash cattle traded as high as $136 and $214 (beef) in the North. Wholesale beef prices were up 0.1% on a Fri/Fri basis in the Choice, and up 1.5% in the Select. Packer margins would appear to be negative if they can’t move those values higher next week. The lower production because of the holidays might give them a little leverage. Weekly slaughter was down 9.9% from the same week in 2012. Year to date beef production is down 1.4%.  Estimated carcass weights are running 1-2 pounds above last year’s actual of 805 pounds. USDA reported weekly beef export sales of 13,200 MT, up from both of the two previous weeks.  

Hog futures were down 0.7%, continuing a month long slide. Pork production YTD is down 0.7% from year ago. Pork production this week was 7.5% larger than the same week in 2012. Estimated slaughter totaled 1.843 million head, up 4.52% from last year but down 21.5% from the previous week because of the holiday.  Higher carcass weights (+6# per head vs. last year) are offsetting the smaller head count. USDA reported weekly pork export sales were much improved at 11,300 MT. After the close on Friday, USDA confirmed the shrinkage of the market hog supply, showing 99.4% of what we had in December a year ago. More surprisingly, they showed kept for breeding at only 98.9% of last year despite data suggesting both gilt retention and smaller sow slaughter. Farrowing intentions for Dec-March were up 1.3% from the year ago actual figure.

 Market Watch

This past week was choppy, due to the mid-week holiday. Schedules will be interrupted this coming week as well, with a short trading day on Tuesday and the New Years Day holiday on Wednesday. USDA will update Export Inspections on Monday. Weekly export sales will be delayed until Friday because of the holiday on Wednesday. The market will begin the week dealing with any surprise futures positions inherited during the January options expiration on December 27. Hog traders will also have the fallout from the USDA Hogs and Pigs report. December 31 will mark the expiration of the December cattle futures contract, and delivery notices for January soy complex futures contracts.

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.

The Brugler Marketing Winter Seminars will be held February 17-18 in Dayton, OH and February 20-21 in Omaha, NE. Check our website for registration information.

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