June 14 is Flag Day across the US. A holiday used to celebrate the adoption of the Stars and Stripes as the official US colors 247 years ago. As for the Ag markets there were some other flags moving around in the trade. Specifically for wheat. The bulls have seemingly given up. After a retreat from the recent high they have put up the white surrender flag. BUT as you well know, Wheat takes no prisoners! Bears were even more relentless this week, pushing things ever further. It also seem that packers were putting up their white flags this week, as cash cattle was putting on a show in some places, even reaching upwards of $197. It appears the need the cattle are willing to pay up for them!
Corn futures put on a solid midweek performance after USDA’s reports, but the trade had different ideas in mind on Friday. When the final bell rang on the week, July was up just 1 ¼ cents (0.28%). New Crop December was 3 cents higher from last week’s close. The monthly WASDE update from USDA showed no changes to the US balance sheet for old or new crop. South American production was also left alone, as world ending stocks were down 0.7 MMT to 312.4 MMT for old crop and 1.5 MMT for new crop at 310.77 MMT. Crop Progress data showed 95% of the US corn crop planted and 85% emerged as of 6/9. Condition ratings were down 1 to 74% gd/ex, with the Brugler500 index also down 1 to 384. EIA data showed a 49,000 barrel per day drop in ethanol production during the week that ended on 6/7 to 1.023 million bpd. Ethanol stocks were up a modest 170,000 barrels to 23.222 million. The FAS Export Sales report showed corn bookings at 1.056 MT in the week ending on June 6, with 69,463 MT for new crop. Commitment of Traders data from CFTC showed spec traders slicing 427 contracts from their net short in corn futures and options in the week ending 6/11. That took their net short position to 212,279 contracts as of Tuesday.
The wheat market continued the weaker trend this week as all three exchanges were in near freefall mode. Kansas City was the leader to the downside, with the July contract 38 ¼ cents (5.75%) lower. MPLS futures were next in line, down 39 cents (5.62%). Chicago wheat was 14 ¾ cents in the red for the July contract (2.35%). USDA had no changes to their old crop US balance sheet on Wednesday as they wait for the June 28 stocks report, however, new crop did see a few adjustments. Production was increased by 17 mbu on a hike to HRW. But a 25 mbu increase to exports took stocks a net 8 mbu tighter to 758 mbu. That export hike was mainly due to a 5 MMT cut to the Russian crop in their recent weather issues. Weekly Crop Progress data showed harvest at 12% complete by last Sunday. Condition ratings were down 2% this week at 47% gd/ex, with the Brugler500 index down 3 points to 330. The spring wheat crop was pegged at 98% planted. The Export Sales report showed 24/25 sales of 302,677 MT during the week of 6/6. The weekly CFTC Commitment of Traders report showed spec traders adding 13,432 contracts to their net short in Chicago wheat to 45,116 contracts by June 11. In Kansas City futures, they added back another 2,870 contracts to that short position at 16,408 contracts as of Tuesday.
Soybeans had a back and forth week with July closing just ½ cent higher than last Friday’s close. New crop November was down 8 cents in that same time frame. Meal was somewhat held up this week with a $7.70 gain. Bean oil was a total of just 5 ticks higher from the Friday/Friday close. The monthly WASDE data showed very little bull friendly news on the few adjustments made, with old and new crop US stocks up 10 mbu to 350 mbu and 455 mbu respectively. WAOB did trim Brazil production by 1 MMT to 153 MMT. The NASS Crop Progress report showed 87% of the US soybean crop planted by June 9, with initial crop ratings at 72% gd/ex and a Brugler500 at 379 (100-500 point scale). Export Sales data tallied bean bookings improving to 377,098 MT in the week that ended on June 6. New crop business continues to be slow with just 3,020 MT reported in that week. Commitment of Traders data showed managed money spec funds adding another 16,139 contracts to their net short in soybean futures and options during the week of 6/11. That took them to a net short 75,880 contracts as of Tuesday. Commercials saw a cut to their net short by 13,554 contracts to -23,959 contracts.
Live cattle got some help late in the week with June up $4.65 (2.55%) since last Friday. Cash trade took hold of the market this week, with the South up to $186 and even a few $195 per USDA. The North was tallied at $195-196 and some $197. Feeders were back up $7.70 this week for a 2.77% gain. The CME Feeder Cattle Index was up $4.93 week/week to $256.13. Wholesale boxed beef quotes were higher this week. Choice boxes were up $3.14 (1%) at $319.89, while Select was $2.67 higher to $303.81. The Chc/Sel spread was cut down to $16.08. Weekly beef production was up 0.1% from last week and 1.7% higher vs. the same week last year. That took the YTD beef production to down 1.6% from the same time a year ago, with cattle slaughter down 4.4%. Beef export sales totaled 11,978 MT in the week ending on June 6, a 12-week low. Shipments in that week were a 3-week high at 16,570 MT. Managed money spec funds cutting back 4,252 contracts from their net long in live cattle futures and options as of June 11 to 48,489 contracts.
Hogs saw a slightly higher close this week, thanks to a stronger Friday session, with July up 15 cents. The CME Lean Hog Index was up 34 cents at $91.58. USDA’s Pork Carcass Cutout bounced around this week, but finished up $0.44 (0.4%) to $101.35. The butt and belly were the only primals reported higher this week. Weekly pork production was down 1.2% from last week but up 4.5% from the same week last year. YTD hog slaughter has run just 0.9% above last year, with pork production just 0.8% higher. The weekly Export Sales report showed 30,122 MT of pork in the week ending on June 6, up from the week prior. Exports were tallied at 32,797 MT, a 12-week low. Weekly Commitment of Traders data showed specs cutting another 10,083 contracts from their net long position as of 6/11 to just 6,171 contracts.
Cotton futures continued their selling streak, with July losing another 287 points on the week. Sellers were a little more apprehensive in new crop December, down just 75 points. WASDE data from Wednesday showed a 450,000 bale hike to ending stocks for old crop, as exports were cut by 500,000 bales. That helped to increase the new crop carry by 400,000 bales to a projected 4.1 million. The weekly Crop Progress report showed 80% of the US cotton crop planted as of 6/9, matching the average. Cotton condition ratings were down 5% to 56% gd/ex, with the Brugler500 index at 353. USDA’s Export Sales report showed old crop sales at 177,144 RB in the week that ended on 6/6. New crop sales totaled 177,381 RB. Export shipments continue their sluggish rate, at just 186,645 RB. The FSA cut the Adjusted World Price for cotton by 81 points on Thursday, to 57.32 cents/lb. CFTC data indicated managed money spec funds with their largest net short in nearly 5 years at 35,735 contracts. That was an increase of 11,827 contracts in the week of June 11.
Market Watch
Next week starts out with the Monday morning Export Inspections report, and the NASS Crop Progress report that afternoon. NOPA data will also be released that morning. On Wednesday, the markets and government will be closed in observation of Juneteenth. That will push back the EIA ethanol stocks and production data to Thursday morning, as well as the Export Sales report to Friday morning. The monthly Cattle on Feed report will be out on Friday afternoon. Friday is also the expiration of July corn, bean and wheat options. Finally, on Friday, June Live cattle and July Cotton options will expire.
See Page 4 for Tech Talk!
December corn had a nice little rally going, though it was pared back by the losses on Friday. We did do some chart damage to the upside this week, but some of it was negated by the weaker action to end the week. In the first week of June, we did hold at a 78.6% Fib retracement support of $4.56 ¾. That also coincided with a stochastics and RSI buy signal. We did bounce above the 18-day and 100-day moving averages on Thursday, but the 40-day stopped the pop at $4.765. That is the current test to break through. The bear argument? This could be wave 4 of an Elliot 5-wave, with another leg lower yet, insinuating a test of the $4.46 low. If the forecast remains wet, that is a logical solution. As rebuttal to that is that DMI+ (positive momentum) is above DMI- at the moment. To the upside, we still have that gap at $5.03, which was prevented from getting filled by the 61.8% retracement off the LOC low to high at $4.96 ¾. Gaps are meant to be filled! But there are still several layers to chew through before that.
There is a risk of loss in futures and options trading. Similar risks exist for cash commodity producers. Past performance is not necessarily indicative of future results.
Copyright 2024 Brugler Marketing & Management, LLC. All rights reserved.
Austin Schroeder
Brugler Marketing & Management LLC
Phone: 312-264-4333
There is a risk of loss in futures and options trading. Past performance is not necessarily indicative of future results.
Copyright 2024, Brugler Marketing & Management LLC. All rights reserved.
Raise The Flag. Ag Marketing Report 06/17/2024
June 14 is Flag Day across the US. A holiday used to celebrate the adoption of the Stars and Stripes as the official US colors 247 years ago. As for the Ag markets there were some other flags moving around in the trade. Specifically for wheat. The bulls have seemingly given up. After a retreat from the recent high they have put up the white surrender flag. BUT as you well know, Wheat takes no prisoners! Bears were even more relentless this week, pushing things ever further. It also seem that packers were putting up their white flags this week, as cash cattle was putting on a show in some places, even reaching upwards of $197. It appears the need the cattle are willing to pay up for them!
Corn futures put on a solid midweek performance after USDA’s reports, but the trade had different ideas in mind on Friday. When the final bell rang on the week, July was up just 1 ¼ cents (0.28%). New Crop December was 3 cents higher from last week’s close. The monthly WASDE update from USDA showed no changes to the US balance sheet for old or new crop. South American production was also left alone, as world ending stocks were down 0.7 MMT to 312.4 MMT for old crop and 1.5 MMT for new crop at 310.77 MMT. Crop Progress data showed 95% of the US corn crop planted and 85% emerged as of 6/9. Condition ratings were down 1 to 74% gd/ex, with the Brugler500 index also down 1 to 384. EIA data showed a 49,000 barrel per day drop in ethanol production during the week that ended on 6/7 to 1.023 million bpd. Ethanol stocks were up a modest 170,000 barrels to 23.222 million. The FAS Export Sales report showed corn bookings at 1.056 MT in the week ending on June 6, with 69,463 MT for new crop. Commitment of Traders data from CFTC showed spec traders slicing 427 contracts from their net short in corn futures and options in the week ending 6/11. That took their net short position to 212,279 contracts as of Tuesday.
The wheat market continued the weaker trend this week as all three exchanges were in near freefall mode. Kansas City was the leader to the downside, with the July contract 38 ¼ cents (5.75%) lower. MPLS futures were next in line, down 39 cents (5.62%). Chicago wheat was 14 ¾ cents in the red for the July contract (2.35%). USDA had no changes to their old crop US balance sheet on Wednesday as they wait for the June 28 stocks report, however, new crop did see a few adjustments. Production was increased by 17 mbu on a hike to HRW. But a 25 mbu increase to exports took stocks a net 8 mbu tighter to 758 mbu. That export hike was mainly due to a 5 MMT cut to the Russian crop in their recent weather issues. Weekly Crop Progress data showed harvest at 12% complete by last Sunday. Condition ratings were down 2% this week at 47% gd/ex, with the Brugler500 index down 3 points to 330. The spring wheat crop was pegged at 98% planted. The Export Sales report showed 24/25 sales of 302,677 MT during the week of 6/6. The weekly CFTC Commitment of Traders report showed spec traders adding 13,432 contracts to their net short in Chicago wheat to 45,116 contracts by June 11. In Kansas City futures, they added back another 2,870 contracts to that short position at 16,408 contracts as of Tuesday.
Soybeans had a back and forth week with July closing just ½ cent higher than last Friday’s close. New crop November was down 8 cents in that same time frame. Meal was somewhat held up this week with a $7.70 gain. Bean oil was a total of just 5 ticks higher from the Friday/Friday close. The monthly WASDE data showed very little bull friendly news on the few adjustments made, with old and new crop US stocks up 10 mbu to 350 mbu and 455 mbu respectively. WAOB did trim Brazil production by 1 MMT to 153 MMT. The NASS Crop Progress report showed 87% of the US soybean crop planted by June 9, with initial crop ratings at 72% gd/ex and a Brugler500 at 379 (100-500 point scale). Export Sales data tallied bean bookings improving to 377,098 MT in the week that ended on June 6. New crop business continues to be slow with just 3,020 MT reported in that week. Commitment of Traders data showed managed money spec funds adding another 16,139 contracts to their net short in soybean futures and options during the week of 6/11. That took them to a net short 75,880 contracts as of Tuesday. Commercials saw a cut to their net short by 13,554 contracts to -23,959 contracts.
Live cattle got some help late in the week with June up $4.65 (2.55%) since last Friday. Cash trade took hold of the market this week, with the South up to $186 and even a few $195 per USDA. The North was tallied at $195-196 and some $197. Feeders were back up $7.70 this week for a 2.77% gain. The CME Feeder Cattle Index was up $4.93 week/week to $256.13. Wholesale boxed beef quotes were higher this week. Choice boxes were up $3.14 (1%) at $319.89, while Select was $2.67 higher to $303.81. The Chc/Sel spread was cut down to $16.08. Weekly beef production was up 0.1% from last week and 1.7% higher vs. the same week last year. That took the YTD beef production to down 1.6% from the same time a year ago, with cattle slaughter down 4.4%. Beef export sales totaled 11,978 MT in the week ending on June 6, a 12-week low. Shipments in that week were a 3-week high at 16,570 MT. Managed money spec funds cutting back 4,252 contracts from their net long in live cattle futures and options as of June 11 to 48,489 contracts.
Hogs saw a slightly higher close this week, thanks to a stronger Friday session, with July up 15 cents. The CME Lean Hog Index was up 34 cents at $91.58. USDA’s Pork Carcass Cutout bounced around this week, but finished up $0.44 (0.4%) to $101.35. The butt and belly were the only primals reported higher this week. Weekly pork production was down 1.2% from last week but up 4.5% from the same week last year. YTD hog slaughter has run just 0.9% above last year, with pork production just 0.8% higher. The weekly Export Sales report showed 30,122 MT of pork in the week ending on June 6, up from the week prior. Exports were tallied at 32,797 MT, a 12-week low. Weekly Commitment of Traders data showed specs cutting another 10,083 contracts from their net long position as of 6/11 to just 6,171 contracts.
Cotton futures continued their selling streak, with July losing another 287 points on the week. Sellers were a little more apprehensive in new crop December, down just 75 points. WASDE data from Wednesday showed a 450,000 bale hike to ending stocks for old crop, as exports were cut by 500,000 bales. That helped to increase the new crop carry by 400,000 bales to a projected 4.1 million. The weekly Crop Progress report showed 80% of the US cotton crop planted as of 6/9, matching the average. Cotton condition ratings were down 5% to 56% gd/ex, with the Brugler500 index at 353. USDA’s Export Sales report showed old crop sales at 177,144 RB in the week that ended on 6/6. New crop sales totaled 177,381 RB. Export shipments continue their sluggish rate, at just 186,645 RB. The FSA cut the Adjusted World Price for cotton by 81 points on Thursday, to 57.32 cents/lb. CFTC data indicated managed money spec funds with their largest net short in nearly 5 years at 35,735 contracts. That was an increase of 11,827 contracts in the week of June 11.
Market Watch
Next week starts out with the Monday morning Export Inspections report, and the NASS Crop Progress report that afternoon. NOPA data will also be released that morning. On Wednesday, the markets and government will be closed in observation of Juneteenth. That will push back the EIA ethanol stocks and production data to Thursday morning, as well as the Export Sales report to Friday morning. The monthly Cattle on Feed report will be out on Friday afternoon. Friday is also the expiration of July corn, bean and wheat options. Finally, on Friday, June Live cattle and July Cotton options will expire.
See Page 4 for Tech Talk!
December corn had a nice little rally going, though it was pared back by the losses on Friday. We did do some chart damage to the upside this week, but some of it was negated by the weaker action to end the week. In the first week of June, we did hold at a 78.6% Fib retracement support of $4.56 ¾. That also coincided with a stochastics and RSI buy signal. We did bounce above the 18-day and 100-day moving averages on Thursday, but the 40-day stopped the pop at $4.765. That is the current test to break through. The bear argument? This could be wave 4 of an Elliot 5-wave, with another leg lower yet, insinuating a test of the $4.46 low. If the forecast remains wet, that is a logical solution. As rebuttal to that is that DMI+ (positive momentum) is above DMI- at the moment. To the upside, we still have that gap at $5.03, which was prevented from getting filled by the 61.8% retracement off the LOC low to high at $4.96 ¾. Gaps are meant to be filled! But there are still several layers to chew through before that.
There is a risk of loss in futures and options trading. Similar risks exist for cash commodity producers. Past performance is not necessarily indicative of future results.
Copyright 2024 Brugler Marketing & Management, LLC. All rights reserved.
Austin Schroeder
Brugler Marketing & Management LLC
Phone: 312-264-4333
There is a risk of loss in futures and options trading. Past performance is not necessarily indicative of future results.
Copyright 2024, Brugler Marketing & Management LLC. All rights reserved.