If you follow politics closely, this week was one for the history books. Things are still very polarized. I don’t follow it close enough to know all the intricate details, but enough to know how anything that is said can impact the market and the agricultural sector. Time is limited, and as a father of three, focusing on politics outside of my career is low on the list. However, even from the sort of this outside perspective, our political environment is one full of division and animosity. In the ag markets, the division runs just as rampant, with the bulls and the bears always at each other’s throats, figuratively of course. The bears have been in control of the grains for a while now, even overreaching their ‘executive’ powers, being at or near record net shorts. But just as the tides tend to shift in the political theater, the markets are mean reverting. There will likely be a time when the tides shift and the bears want to take some money off the table and transfer some of the power to the bulls (via short covering), the bulls just need the right candidate!
Corn futures continued their slide this week, as September was 11 1/2 cents lower on the week, with December down another 10 cents. The weekly Crop Progress report tallied 41% of the US corn crop showing silk as of July 14, 9% ahead of normal. Condition ratings were left unchanged at 68% gd/ex, with the Brugler500 index remaining at 372. EIA data showed a near record ethanol output in the week of July 12, at 1.106 million barrels per day, a 52,000 bpd increase from the week prior. Even so, stocks saw a draw of 443,000 barrels to 23.16 million barrels. Export Sales data from Thursday pegged corn bookings at 437,840 MT in the week ending on July 11, with just 485,681 MT for new crop. Commitment of Traders data showed managed money in corn futures and options trimming back their former record net short by 10,587 contracts during the week that ended on July 16. That took them to a still large net short of 343,396 contracts by that Tuesday.
Wheat was mixed across the three exchanges this week, as the hard wheats headed higher. Minneapolis spring wheat led the charge as some areas are beginning to dry out, with September up 12 ¼ cents. That helped Kansas City September, which saw a 2 ¼ cent gain on the week. Chicago wheat fell 8 cents in the September contract. Monday’s Crop Progress report indicated that the winter wheat harvest was 71% complete by July 14, 9% above the average. The spring wheat crop was 76% headed, 2% behind the average pace, with conditions up 2% to 77% and 4 points higher to 384 on the Brugler500 index. Thursday’s Export Sales report tallied 24/25 sales improving from the previous holiday week to 578,502 MT during the week of July 11. Outside of that, we had a couple large international tenders this week, with Egypt buying 770,000 MT and Algeria purchasing at least 700,000 MT, though very little is thought to be US origin. CFTC data showed CBT wheat spec funds adding to their net short by 6,749 contracts to 75,886 contracts as of July 16. In KC wheat, they were adding back 3,085 contracts to their net short at 43,896 contracts as of Tuesday.
Soybeans continued to fall this week. August was down 7 ¾ cents, as November was down 29 ¼ cents. Pressure from the products added to the weakness, with soy meal $2/ton lower since last Friday and bean oil down 9 points. Soybeans were shown at 51% blooming as of last Sunday, above the 44% average pace and 18% setting pods, faster than the 12% average. Condition ratings were rated at 68% gd/ex, with 1% dropping from excellent to good and taking the Brugler500 index down 1 point to 370. Weekly Export Sales for beans were 228,111 MT in the week that ended on July 11. New crop business picked up again, to the largest this marketing year to 507,025 MT in that week. We did have a couple large daily sale announcements this week, totaling 510,000 MT of soybeans sold to unknown destinations for new crop and a total of 255,000 MT of meal sold to unknown for 2024/25. Those go in next week’s USDA report. NOPA crush data was released on Monday with 175.6 mbu of soybeans crushed among its members in June, 4.37% below May on the one less calendar day and up 6.41% from last year. Commitment of Traders data tallied managed money spec funds adding to their record net short as of July 16 at 185,750 contracts. That was an increase of 13,145 contracts during the week.
Despite a weaker beef component and slight drop to cash, live cattle were up 72 cents (0.4%). Cash trade was steady to weaker this week with sales of $187-188.50 in the south, and northern trade at $196. Feeders were $3.05 lower (-1.18%) over the course of the week. The CME Feeder Cattle Index was back down $1.86 week/week to $259.18. Friday’s Cattle on Feed report showed June feeder placements at 1.564 million head, a 6.85% drop from last year, while marketings were down 8.74% at 1.786 million head. That took the on feed inventory to 11.304 million head by July 1, a 0.54% increase from last year. Wholesale boxed beef continues to see weak post-4th holiday demand. Choice boxes fell back $8.23 (2.6%) at $313.83, while Select was $3.51 lower to $298.80. Weekly beef production was down 2.8% from last week due slower Friday kill and 3.2% lower vs. the same week last year at 491.7 million lbs. That left the YTD beef production down 1.6% from the same time a year ago, with cattle slaughter down 4.5%. Weekly Export Sales saw beef export sales total 15,401 MT in the week that ended on July 11, well above last week. Shipments were an improvement from the week prior at 15,588 MT. Commitment of Traders data showed a 3,666 contract reduction in their net long as of July 16 at 58,240 contracts in live cattle futures and options.
Hogs put together a rally this week as August was up $3.125 (3.53%), with support coming from the pork component. The CME Lean Hog Index was back up 62 cents at $89.27 as of July 17. USDA’s Pork Carcass Cutout found some continued strength this week, rallying a total of $3.31 (+3.4%) to $102.16. Just the butt was lower this week, with the belly up $11.91. Weekly pork production was back down 0.1% from last week, and 3.6% larger than the same week last year at 502.8 million lbs. YTD hog slaughter has run 1.1% above last year, with pork production 1.2% higher. The USDA Export Sales pegged pork export sales at 23,674 MT, during the week of July 11, a 4-week low. Shipments were back down from last week at 31,936 MT. Lean hog spec traders added just 192 contracts of futures and options to their net short at 11,604 contracts by last Tuesday July 16.
Cotton slipped back 57 points in the December contract this week. NASS Crop Progress data tallied 64% of the US cotton crop squared with 27% setting bolls, both ahead of normal. Cotton condition ratings were down another 1% to 44% gd/ex, with the Brugler500 index at 320, another slippage of 1 point for the week. Export Sales data showed old crop sales dropping to 27,140 RB in the week that ended on 7/11. New crop sales picked up to 165,590 RB, a 5-week high. Export shipments slipped back down to 113,106 RB during that week, the lowest since last November. The FSA raised the Adjusted World Price for cotton by 34 points on Thursday, to 56.42 cents/lb. Weekly data from CFTC showed managed money spec funds in cotton futures and options trimming back 223 contracts from their large net short as of July 16. By that Tuesday they were net short 40,226 contracts.
Market Watch
Next Monday kicks things off with the Export Inspections report in the morning, as the afternoon shows the weekly Crop Progress report. Skip ahead to Wednesday, and EIA releases their Weekly Petroleum Status Report, including an ethanol update. Export Sales data will be released on Thursday morning, with the NASS Cold Storage report released that afternoon. On Friday, August grain options will expire.
See page 4 for tech talk!
Tech Talk: November Soybeans
November soybeans have had a rough couple of months. After hitting new contract lows this week and a dragonfly doji on Thursday’s contract low, a possible reversal signal, the market headed back lower on Friday’s failed rally attempt. The closest thing to support at the moment is ta 2X Fib expansion at $10.15, after breaking the 1.618 on Monday. The positive? Stochastics are oversold and beginning to cross. If Thursday’s low holds the initial objective is the 18-day moving average at $10.825, as the 1/3 speedline resistance is at $10.955. If we do get some short covering to come into play, the 38.2% Fib retracement is at $11.075.
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.
Division. Ag Marketing Report 07/23/2024
If you follow politics closely, this week was one for the history books. Things are still very polarized. I don’t follow it close enough to know all the intricate details, but enough to know how anything that is said can impact the market and the agricultural sector. Time is limited, and as a father of three, focusing on politics outside of my career is low on the list. However, even from the sort of this outside perspective, our political environment is one full of division and animosity. In the ag markets, the division runs just as rampant, with the bulls and the bears always at each other’s throats, figuratively of course. The bears have been in control of the grains for a while now, even overreaching their ‘executive’ powers, being at or near record net shorts. But just as the tides tend to shift in the political theater, the markets are mean reverting. There will likely be a time when the tides shift and the bears want to take some money off the table and transfer some of the power to the bulls (via short covering), the bulls just need the right candidate!
Corn futures continued their slide this week, as September was 11 1/2 cents lower on the week, with December down another 10 cents. The weekly Crop Progress report tallied 41% of the US corn crop showing silk as of July 14, 9% ahead of normal. Condition ratings were left unchanged at 68% gd/ex, with the Brugler500 index remaining at 372. EIA data showed a near record ethanol output in the week of July 12, at 1.106 million barrels per day, a 52,000 bpd increase from the week prior. Even so, stocks saw a draw of 443,000 barrels to 23.16 million barrels. Export Sales data from Thursday pegged corn bookings at 437,840 MT in the week ending on July 11, with just 485,681 MT for new crop. Commitment of Traders data showed managed money in corn futures and options trimming back their former record net short by 10,587 contracts during the week that ended on July 16. That took them to a still large net short of 343,396 contracts by that Tuesday.
Wheat was mixed across the three exchanges this week, as the hard wheats headed higher. Minneapolis spring wheat led the charge as some areas are beginning to dry out, with September up 12 ¼ cents. That helped Kansas City September, which saw a 2 ¼ cent gain on the week. Chicago wheat fell 8 cents in the September contract. Monday’s Crop Progress report indicated that the winter wheat harvest was 71% complete by July 14, 9% above the average. The spring wheat crop was 76% headed, 2% behind the average pace, with conditions up 2% to 77% and 4 points higher to 384 on the Brugler500 index. Thursday’s Export Sales report tallied 24/25 sales improving from the previous holiday week to 578,502 MT during the week of July 11. Outside of that, we had a couple large international tenders this week, with Egypt buying 770,000 MT and Algeria purchasing at least 700,000 MT, though very little is thought to be US origin. CFTC data showed CBT wheat spec funds adding to their net short by 6,749 contracts to 75,886 contracts as of July 16. In KC wheat, they were adding back 3,085 contracts to their net short at 43,896 contracts as of Tuesday.
Soybeans continued to fall this week. August was down 7 ¾ cents, as November was down 29 ¼ cents. Pressure from the products added to the weakness, with soy meal $2/ton lower since last Friday and bean oil down 9 points. Soybeans were shown at 51% blooming as of last Sunday, above the 44% average pace and 18% setting pods, faster than the 12% average. Condition ratings were rated at 68% gd/ex, with 1% dropping from excellent to good and taking the Brugler500 index down 1 point to 370. Weekly Export Sales for beans were 228,111 MT in the week that ended on July 11. New crop business picked up again, to the largest this marketing year to 507,025 MT in that week. We did have a couple large daily sale announcements this week, totaling 510,000 MT of soybeans sold to unknown destinations for new crop and a total of 255,000 MT of meal sold to unknown for 2024/25. Those go in next week’s USDA report. NOPA crush data was released on Monday with 175.6 mbu of soybeans crushed among its members in June, 4.37% below May on the one less calendar day and up 6.41% from last year. Commitment of Traders data tallied managed money spec funds adding to their record net short as of July 16 at 185,750 contracts. That was an increase of 13,145 contracts during the week.
Despite a weaker beef component and slight drop to cash, live cattle were up 72 cents (0.4%). Cash trade was steady to weaker this week with sales of $187-188.50 in the south, and northern trade at $196. Feeders were $3.05 lower (-1.18%) over the course of the week. The CME Feeder Cattle Index was back down $1.86 week/week to $259.18. Friday’s Cattle on Feed report showed June feeder placements at 1.564 million head, a 6.85% drop from last year, while marketings were down 8.74% at 1.786 million head. That took the on feed inventory to 11.304 million head by July 1, a 0.54% increase from last year. Wholesale boxed beef continues to see weak post-4th holiday demand. Choice boxes fell back $8.23 (2.6%) at $313.83, while Select was $3.51 lower to $298.80. Weekly beef production was down 2.8% from last week due slower Friday kill and 3.2% lower vs. the same week last year at 491.7 million lbs. That left the YTD beef production down 1.6% from the same time a year ago, with cattle slaughter down 4.5%. Weekly Export Sales saw beef export sales total 15,401 MT in the week that ended on July 11, well above last week. Shipments were an improvement from the week prior at 15,588 MT. Commitment of Traders data showed a 3,666 contract reduction in their net long as of July 16 at 58,240 contracts in live cattle futures and options.
Hogs put together a rally this week as August was up $3.125 (3.53%), with support coming from the pork component. The CME Lean Hog Index was back up 62 cents at $89.27 as of July 17. USDA’s Pork Carcass Cutout found some continued strength this week, rallying a total of $3.31 (+3.4%) to $102.16. Just the butt was lower this week, with the belly up $11.91. Weekly pork production was back down 0.1% from last week, and 3.6% larger than the same week last year at 502.8 million lbs. YTD hog slaughter has run 1.1% above last year, with pork production 1.2% higher. The USDA Export Sales pegged pork export sales at 23,674 MT, during the week of July 11, a 4-week low. Shipments were back down from last week at 31,936 MT. Lean hog spec traders added just 192 contracts of futures and options to their net short at 11,604 contracts by last Tuesday July 16.
Cotton slipped back 57 points in the December contract this week. NASS Crop Progress data tallied 64% of the US cotton crop squared with 27% setting bolls, both ahead of normal. Cotton condition ratings were down another 1% to 44% gd/ex, with the Brugler500 index at 320, another slippage of 1 point for the week. Export Sales data showed old crop sales dropping to 27,140 RB in the week that ended on 7/11. New crop sales picked up to 165,590 RB, a 5-week high. Export shipments slipped back down to 113,106 RB during that week, the lowest since last November. The FSA raised the Adjusted World Price for cotton by 34 points on Thursday, to 56.42 cents/lb. Weekly data from CFTC showed managed money spec funds in cotton futures and options trimming back 223 contracts from their large net short as of July 16. By that Tuesday they were net short 40,226 contracts.
Market Watch
Next Monday kicks things off with the Export Inspections report in the morning, as the afternoon shows the weekly Crop Progress report. Skip ahead to Wednesday, and EIA releases their Weekly Petroleum Status Report, including an ethanol update. Export Sales data will be released on Thursday morning, with the NASS Cold Storage report released that afternoon. On Friday, August grain options will expire.
See page 4 for tech talk!
Tech Talk: November Soybeans
November soybeans have had a rough couple of months. After hitting new contract lows this week and a dragonfly doji on Thursday’s contract low, a possible reversal signal, the market headed back lower on Friday’s failed rally attempt. The closest thing to support at the moment is ta 2X Fib expansion at $10.15, after breaking the 1.618 on Monday. The positive? Stochastics are oversold and beginning to cross. If Thursday’s low holds the initial objective is the 18-day moving average at $10.825, as the 1/3 speedline resistance is at $10.955. If we do get some short covering to come into play, the 38.2% Fib retracement is at $11.075.
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.