Too Much In The Field?

Published on: 21:24PM Mar 06, 2015


Market Watch with Alan Brugler

March 6, 2015

Too Much In The Field?

A quick look at this week’s table shows the field crops showing losses (with the exception of oats), while the livestock sector was a bit more positive. With the Northern Hemisphere spring planting season just around the corner, and world stocks/use ratios at multi-year highs, the market appears to be trying to discourage some production. The flip side of that equation would be that we are in the last half of the marketing year for the 2014/15 crop and we’re starting to put it on sale to get the shelves (and bins) cleared out before harvest. Either way it was a better week for hedgers than for cash grain owning speculators (producers).  The srong US dollar is a headwind that makes it more difficult to empty those bins via exports.

Corn  lost 1.4% for the week, with nearly all of the loss on Friday. US export sales for the previous week were 986,800 MT, on the high end of expectations. Total export commitments are 80% of the full year USDA estimate, running ahead of the 76% average pace for this date. Weekly ethanol production dropped slightly from the previous week, with the helpful side effect of reducing ethanol stocks. The Commitment of Traders report on Friday showed the large spec funds bailing out of more than 37% of their net long position in corn during the week. This was as of Tuesday night and doesn’t include the Friday price drop.













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Feeder Cattle







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March soybeans dropped more than 5.2% this week, losing 51 1/2 cents. The truck strike in Brazil was suspended for a week, which allowed ports to replenish their severely drawn down inventory.  Net soybean export sales were 499,500 MT for old crop plus 1,700 MT for the new crop. New crop interest dried up quickly with the rally last week.  Meal sales were solid at 158,600 MT. In the weekly COT report from the CFTC, managed money accounts were shown to be net long 3777 contracts as of Tuesday night.  That was up 3,493 from the previous week. These funds had been net short up until the previous week, and are likely back  close to even after Wednesday and Thursday sell off.   

CBT wheat ended the week with an ugly loss of 6.5%, posting new life of contract lows. KC HRW was down a more modest 13 3/4 cents due to winterkill risks in the cental US and confirmed losses in Ukraine. Weekly wheat export sales reported by USDA were slightly above last week at 507,600 MT. The weekly Commitment of Traders Report from the CFTC showed managed money accounts getting more bearish on Chicago wheat. Their net short expand by another 24,177 contracts.

March cotton futures lost 2.8% for the week. They will expire on Monday. The combination of negative weekly export sales (cancellations and deferrals larger than new sales) and a sharply higher US dollar proved toxic to the bulls. Net weekly export sales reported by the USDA amounted to a net reduction of 62,500 RB for old crop Upland cotton.  New crop bookings were for 22,000 RB. Pima sales came in at 6,100 RB of old crop with no new crop bookings reported.The AWP for the week beginning March 6 is 49.17, with the LDP rising to 2.83 cents from 2.52 cents the previous week.

April cattle futures were up 1.7% this week. March feeders were up 3.7% on the bullish combination of higher cattle and lower feed costs. Some feeder charts posted Head & Shoulders bottoms. Wholesale beef was mixed for the week. Choice boxes gain 0.3% while Select boxes were down 0.6% from Friday to Friday. The Choice/Select spread was $4.09.  Beef production in the week ended March 6 wasw up 0.7% from the same week in 2014 despite slaughter being down 1.8%. Year to date, production is still down 4.5% from last year. Estimated carcass weights are running 21 pounds above year ago as feedlots try to work out of some very expensive yearlings. Export sales are still draggy, with beef persistently high vs. pork and the dollar strength making prices look high in Japanese yen.

Hog futures were down a bit more than 2% for the week, but are holding above the previous lows. Pork prices continued to slide this week with the carcass cutout off another $1.69 at $68.82. USDA weekly pork production was up a whopping 7.7% from the same week in 2014, with slaughter up 7.2%. on the bullish side, it slowed 1.6% from the previous week.  The total year to date, is 4.504 billion pounds, up 3.3% from a year ago.  Weekly net pork export sales this week increased once again, to 30,900 MT and the largest of 2015. Mexico, Japan and South Korea were all in the market. Weekly hog slaughter including Saturday is estimated at 2.255 million head, down 1.5% on the week.

Market Watch

First off, don’t forget to move your clock ahead an hour on Saturday night (or Sunday morning) if you live in a Daylight Savings Time area.  It begins on March 8.  Monday will feature the regular USDA Export Inspections report, and also the expiration of the March cotton contract. USDA will issue its montly WASDE Supply/Demand estimates this week on Tuesday morning. These are the warm up act for the Grain Stocks and Prospective Plantings reports coming out on March 31. We will have our monthly National Ag Marketing Strategy Group webinar on Tuesday evening. See below. Weekly Export Sales is expected on Thursday morning. Friday will mark the expirations of the March grain futures contracts. In two weeks it will officially be Spring!

Please register for our March NAMSG Outlook & Strategy Webinar ($45 for non-AMSG members)on Tuesday, March 10, 2015 7:00 PM - 8:30 PM CDT at:

Visit our Brugler web site at, find our iPad app "AgMarket" in the Apple app store, or call 402-289-2330 for more information on our consulting and advisory services for farm family enterprises and agribusinesses.

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