One thing is common most every 4th of July, families and friends all across the country will get together to celebrate the US holiday, and there’s a good chance hot dogs are part of the menu. One other thing that is common is trade volume around the holiday (especially near the weekends) tends to be thin. That brings us to the market action from this particular Friday, that saw corn, beans, and wheat post a nice bounce into the weekend. Now, whether this was a byproduct of low trade volume and a dead cat bounce, the start of a hot! (dog) market, or a heavily short market seeing some possibilities of dryness into the middle of July and covering some shorts, we’ll have to wait and see. Once all the smoke clears from the fireworks over the last week (maybe by Monday morning?), we’ll likely have a better indication. But until then, enjoy the rest of the weekend!
Corn saw better price action this week, helped out by Friday’s lame duck session, as sellers failed to go back and test last Friday’s lows from the USDA report fallout. September was 3 cents higher on the holiday shortened week, with December back up 3 ¼ cents. The weekly Crop Progress report om Monday showed 11% of the US corn crop silking as of 6/30, 5% ahead of normal. Condition ratings were down another 2% to 67% gd/ex, with the Brugler500 index slipping 4 points to 370. Weekly EIA data saw a 21,000 barrel per day increase in ethanol production during the week that ended on 6/28, to 1.064 million bpd. Ethanol stocks were building by 171,000 barrels to 23.594 million. USDA’s Grains Crushing report showed 453.7 mbu of corn used for ethanol production during May, up 7.4% from the month prior. May corn export shipments totaled 5.97 MMT per Census, or 235 mbu, which was down vs. the same month in 2023. Weekly Export Sales data tallied corn bookings at just 357,152 MT in the week ending on June 27, with 311,538 MT for new crop.
Wheat trended sideways for much of the week, but s stronger Friday “dressed up the close”. Chicago wheat was back up 17 cents in the September contract (+2.96%). Kansas City September rallied just 12 ¾ cents as Friday erased previous weakness. MPLS futures were up 20 ¼ cents in the September contract for a 3.3% climb. US harvest pressure continues, as Crop Progress data showed harvest at 54% complete by last Sunday, still well above the 39% average. Condition ratings were back down 1% in the final release of the year at 51% gd/ex, with the Brugler500 index 1 point lower at 341. The spring wheat crop was 38% headed, 1% ahead of the average pace, with conditions up 1% to 72% and 5 points higher to 378 on the Brugler500 index. May wheat exports totaled 1.589 MMT (58.4 mbu), which was a 3-year high. That took the total for the marketing year, including products, to 715 mbu, which is 5 mbu shy of the USDA full year estimate. Delayed Export Sales data from USDA showed 24/25 sales building on last week’s large total to 805,318 MT during the week of 6/27, the largest for any week since last December and beating out most trade expectations.
Soybeans had positive price movement each day this week, with August up 32 ¾ cents and new crop November rallying 25 ¾ cents. A little help from soy meal was provided, up $11.20/ton (3.24%) since last Friday. But the real support was bean oil this week, shooting 5.48 cents higher (a 12.43% move). Weekly Crop Progress data showed 20% of the US soybean crop blooming by June 30, 5% above normal, with 3% setting pods, compared to the 2% average pace. Crop ratings were unchanged at 67% gd/ex, but the Brugler500 index was up 1 at 369 on a 1% shift from good to excellent. The monthly USDA Fats & Oils report showed May soybean crush at 191.97 mbu, an 8.02% increase after April’s drop. Census export data showed 1.41 MMT (51.8 mbu) shipped in May, a 20.4% drop from April but up 42.9% from last year. Friday’s Export Sales report tallied bean bookings slipping to 228,379 MT in the week that ended on June 27. New crop business did pick up, to the second largest this MY, but to just 150,310 MT in that week.
Live cattle were up $1 in the August contract this week, as a positive basis continues to strengthen futures. Cash trade was slow this week with a few light Friday sales of $190 in the south, steady, and northern bids on late Friday afternoon at $198. Feeders were $2.17 higher over the course of the week. The CME Feeder Cattle Index was down $3.52 week/week to $255.08. Wholesale boxed beef quotes were higher this week, widening the Chc/Sel spread in the process to $25.37. Choice boxes were up $4.11 (1.3%) at $330.43, while Select was 56 cents higher to $305.06. Weekly beef production was down 15.4% from last week due to the holiday and 0.3% lower vs. the same week last year at 436.4 million lbs. That left the YTD beef production down 1.6% from the same time a year ago, with cattle slaughter down 4.5%. Beef exports in May were tallied at 258.93 million lbs, a 4-year low and down 0.2% from April. Weekly Export Sales data showed 15,453 MT in beef sales during the week of 6/27, back down from the previous week. Shipments were 16,063 MT, a 4-week low.
Hogs were flat this week, as July managed a 30-cent gain. The CME Lean Hog Index was down 30 cents at $89.45. USDA’s Pork Carcass Cutout felt more pressure this week, ending with a $2.98 (-3%) loss to $94.91. All primals but the picnic were reported lower, with the rib down 8.9% and the butt 4.9% lower. Weekly pork production was down 16% from last week but 7% larger than the same week last year at 438.2 million lbs. YTD hog slaughter has run 1.1% above last year, with pork production 1.2% higher. May pork exports total 584.7 million lbs, a drop of 5.4% from last year and 10.9% below April’s Census Bureau number. The USDA Export Sales for sales in the week ending on June 27 totaled 59,083 MT, the largest weekly sale since March 2021. Export shipments were 30,015 MT, a 3-week high.
Cotton got some pressure late in the week as December was down 171 points, for a 2.35% loss. Crop Progress data indicated 43% of the US cotton crop squared with 11% setting bolls, both ahead of normal. Cotton condition ratings were down another 6% to 50% gd/ex, with the Brugler500 index at 331, a drop of 11 points for the week. USDA’s Cotton Systems report showed 732 RB of cotton consumed during May, well above a year ago and 14.2% larger vs. April. Cotton exports in May totaled 1.01 million bales, which was a drop of 16.6% from last month, and 32.02% lower than the same month last year. USDA’s Export Sales report showed old crop sales picking up modestly to 115,352 RB in the week that ended on 6/27. New crop sales pulled back to just 56,897 RB. Export shipments picked back up to 175,798 RB during that week. The FSA trimmed the Adjusted World Price for cotton by 43 points on Thursday, to 57.80 cents/lb.
Market Watch
As we push further into July, next Monday the news flow will start with the Export Inspections and then show the weekly Crop Progress report with updates to condition ratings and development pace that afternoon. July cotton futures expire on Tuesday. Skip ahead to Wednesday, and the EIA will update ethanol production and stocks data. The weekly Export Sales report will be back on the normal Thursday release schedule, with monthly CPI data released that morning. On Friday, PPI data will be updated, with July grain futures expiring. Not to be overlooked, USDA will also release their monthly Crop Production and WASDE supply/demand estimates on Friday.
See Page 4 for Tech Talk!
Tech Talk: November Soybeans
November soybeans look to be attempting a nice, rounded bottom formation starting with the gravestone doji from last Friday. That is a bearish indicator, but the bulls called the bluff. There has been nothing but higher closes since, with the round number of $11 holding nicely. Parabolic SAR was flipped bullish on Wednesday, normally a first step we look for in a trend reversal. MACD followed suit on Friday and is now bullish, as are the oscillators. Technically speaking, this is a solid sign, but we need more follow-through to confirm it. We’re not convinced on anything just yet, with the close barely breaking the Bollinger midline at $11.27 ¾. The high on Friday was near the 1/3 speedline at $11.33 ¼, which did hold. You’d like to see a close above that to confirm any breakout to the upside. The next objective in doing so would be the 38.2% Fib retracement resistance at $11.47 ¾, with heavier resistance in the $11.65 area.
Austin Schroeder
Brugler Marketing & Management LLC
Phone: 312-264-4333
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.
Dead Cats and Hot Dogs. Ag Marketing Report 07/08/2024
One thing is common most every 4th of July, families and friends all across the country will get together to celebrate the US holiday, and there’s a good chance hot dogs are part of the menu. One other thing that is common is trade volume around the holiday (especially near the weekends) tends to be thin. That brings us to the market action from this particular Friday, that saw corn, beans, and wheat post a nice bounce into the weekend. Now, whether this was a byproduct of low trade volume and a dead cat bounce, the start of a hot! (dog) market, or a heavily short market seeing some possibilities of dryness into the middle of July and covering some shorts, we’ll have to wait and see. Once all the smoke clears from the fireworks over the last week (maybe by Monday morning?), we’ll likely have a better indication. But until then, enjoy the rest of the weekend!
Corn saw better price action this week, helped out by Friday’s lame duck session, as sellers failed to go back and test last Friday’s lows from the USDA report fallout. September was 3 cents higher on the holiday shortened week, with December back up 3 ¼ cents. The weekly Crop Progress report om Monday showed 11% of the US corn crop silking as of 6/30, 5% ahead of normal. Condition ratings were down another 2% to 67% gd/ex, with the Brugler500 index slipping 4 points to 370. Weekly EIA data saw a 21,000 barrel per day increase in ethanol production during the week that ended on 6/28, to 1.064 million bpd. Ethanol stocks were building by 171,000 barrels to 23.594 million. USDA’s Grains Crushing report showed 453.7 mbu of corn used for ethanol production during May, up 7.4% from the month prior. May corn export shipments totaled 5.97 MMT per Census, or 235 mbu, which was down vs. the same month in 2023. Weekly Export Sales data tallied corn bookings at just 357,152 MT in the week ending on June 27, with 311,538 MT for new crop.
Wheat trended sideways for much of the week, but s stronger Friday “dressed up the close”. Chicago wheat was back up 17 cents in the September contract (+2.96%). Kansas City September rallied just 12 ¾ cents as Friday erased previous weakness. MPLS futures were up 20 ¼ cents in the September contract for a 3.3% climb. US harvest pressure continues, as Crop Progress data showed harvest at 54% complete by last Sunday, still well above the 39% average. Condition ratings were back down 1% in the final release of the year at 51% gd/ex, with the Brugler500 index 1 point lower at 341. The spring wheat crop was 38% headed, 1% ahead of the average pace, with conditions up 1% to 72% and 5 points higher to 378 on the Brugler500 index. May wheat exports totaled 1.589 MMT (58.4 mbu), which was a 3-year high. That took the total for the marketing year, including products, to 715 mbu, which is 5 mbu shy of the USDA full year estimate. Delayed Export Sales data from USDA showed 24/25 sales building on last week’s large total to 805,318 MT during the week of 6/27, the largest for any week since last December and beating out most trade expectations.
Soybeans had positive price movement each day this week, with August up 32 ¾ cents and new crop November rallying 25 ¾ cents. A little help from soy meal was provided, up $11.20/ton (3.24%) since last Friday. But the real support was bean oil this week, shooting 5.48 cents higher (a 12.43% move). Weekly Crop Progress data showed 20% of the US soybean crop blooming by June 30, 5% above normal, with 3% setting pods, compared to the 2% average pace. Crop ratings were unchanged at 67% gd/ex, but the Brugler500 index was up 1 at 369 on a 1% shift from good to excellent. The monthly USDA Fats & Oils report showed May soybean crush at 191.97 mbu, an 8.02% increase after April’s drop. Census export data showed 1.41 MMT (51.8 mbu) shipped in May, a 20.4% drop from April but up 42.9% from last year. Friday’s Export Sales report tallied bean bookings slipping to 228,379 MT in the week that ended on June 27. New crop business did pick up, to the second largest this MY, but to just 150,310 MT in that week.
Live cattle were up $1 in the August contract this week, as a positive basis continues to strengthen futures. Cash trade was slow this week with a few light Friday sales of $190 in the south, steady, and northern bids on late Friday afternoon at $198. Feeders were $2.17 higher over the course of the week. The CME Feeder Cattle Index was down $3.52 week/week to $255.08. Wholesale boxed beef quotes were higher this week, widening the Chc/Sel spread in the process to $25.37. Choice boxes were up $4.11 (1.3%) at $330.43, while Select was 56 cents higher to $305.06. Weekly beef production was down 15.4% from last week due to the holiday and 0.3% lower vs. the same week last year at 436.4 million lbs. That left the YTD beef production down 1.6% from the same time a year ago, with cattle slaughter down 4.5%. Beef exports in May were tallied at 258.93 million lbs, a 4-year low and down 0.2% from April. Weekly Export Sales data showed 15,453 MT in beef sales during the week of 6/27, back down from the previous week. Shipments were 16,063 MT, a 4-week low.
Hogs were flat this week, as July managed a 30-cent gain. The CME Lean Hog Index was down 30 cents at $89.45. USDA’s Pork Carcass Cutout felt more pressure this week, ending with a $2.98 (-3%) loss to $94.91. All primals but the picnic were reported lower, with the rib down 8.9% and the butt 4.9% lower. Weekly pork production was down 16% from last week but 7% larger than the same week last year at 438.2 million lbs. YTD hog slaughter has run 1.1% above last year, with pork production 1.2% higher. May pork exports total 584.7 million lbs, a drop of 5.4% from last year and 10.9% below April’s Census Bureau number. The USDA Export Sales for sales in the week ending on June 27 totaled 59,083 MT, the largest weekly sale since March 2021. Export shipments were 30,015 MT, a 3-week high.
Cotton got some pressure late in the week as December was down 171 points, for a 2.35% loss. Crop Progress data indicated 43% of the US cotton crop squared with 11% setting bolls, both ahead of normal. Cotton condition ratings were down another 6% to 50% gd/ex, with the Brugler500 index at 331, a drop of 11 points for the week. USDA’s Cotton Systems report showed 732 RB of cotton consumed during May, well above a year ago and 14.2% larger vs. April. Cotton exports in May totaled 1.01 million bales, which was a drop of 16.6% from last month, and 32.02% lower than the same month last year. USDA’s Export Sales report showed old crop sales picking up modestly to 115,352 RB in the week that ended on 6/27. New crop sales pulled back to just 56,897 RB. Export shipments picked back up to 175,798 RB during that week. The FSA trimmed the Adjusted World Price for cotton by 43 points on Thursday, to 57.80 cents/lb.
Market Watch
As we push further into July, next Monday the news flow will start with the Export Inspections and then show the weekly Crop Progress report with updates to condition ratings and development pace that afternoon. July cotton futures expire on Tuesday. Skip ahead to Wednesday, and the EIA will update ethanol production and stocks data. The weekly Export Sales report will be back on the normal Thursday release schedule, with monthly CPI data released that morning. On Friday, PPI data will be updated, with July grain futures expiring. Not to be overlooked, USDA will also release their monthly Crop Production and WASDE supply/demand estimates on Friday.
See Page 4 for Tech Talk!
Tech Talk: November Soybeans
November soybeans look to be attempting a nice, rounded bottom formation starting with the gravestone doji from last Friday. That is a bearish indicator, but the bulls called the bluff. There has been nothing but higher closes since, with the round number of $11 holding nicely. Parabolic SAR was flipped bullish on Wednesday, normally a first step we look for in a trend reversal. MACD followed suit on Friday and is now bullish, as are the oscillators. Technically speaking, this is a solid sign, but we need more follow-through to confirm it. We’re not convinced on anything just yet, with the close barely breaking the Bollinger midline at $11.27 ¾. The high on Friday was near the 1/3 speedline at $11.33 ¼, which did hold. You’d like to see a close above that to confirm any breakout to the upside. The next objective in doing so would be the 38.2% Fib retracement resistance at $11.47 ¾, with heavier resistance in the $11.65 area.
Austin Schroeder
Brugler Marketing & Management LLC
Phone: 312-264-4333
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.