If you’ve ever driven on a minimum maintenance road right after the rain, or went to check on a pivot only to realize it stopped moving, you likely know how frustrating it can be to be stuck in the mud. Now, there can be several different causes as to why you got stuck in the first place. Whether that is a broken gearbox (or flat tire) on the pivot, or that you forgot to lock in the four wheel drive. Whatever the reason, the feeling of immediate regret is one that a person can live without. In terms of market action for the grains, the bulls have got bogged down pretty deep recently. And despite all their efforts, it seems all they are doing is spinning their tires. Just like that old saying goes, if at some point you are deep enough in a hole, you should probably stop digging. Of course, it doesn’t necessarily help when the bears are assisting with a backhoe!
Corn futures were spinning their tires all week and failed several times at an early session rally to close with September down 9 ¾ cents (2.52%) this week. December was down 8 ¼ cents. Crop Progress data indicated 88% of the US corn crop silking by August 4, with 46% of US corn acres in the dough stage and 7% dented, running ahead of normal pace. Condition ratings were back down 1% to 67% gd/ex, with the Brugler500 index 2 points lower to 370. Ethanol production, and thus corn use, pulled back from last week’s record to 1.067 million barrels per day in the week that ended on August 2, a 42,000 bpd drop on the week according to the EIA. Stocks saw a decrease of 206,000 barrels to 23.767 million barrels. Thursday’s Export Sales report indicated old crop corn bookings at 485,447 MT in the week ending on August 1. New crop sales were light at 249,062 MT in that week. Census showed June corn export shipments at 5.5 MMT, the larges for the month in 3 years. Ethanol exports from the US in June were a monthly record 145.9 million gallons. The weekly Commitment of traders released from CFTC indicated spec traders in the corn market covering more shorts during the week that ended on August 6, by 52,551 contracts. That left them with a still large net short of 242,545 contracts by that Tuesday.
Wheat was mixed across the three markets this week with the hard red varieties feeling some pressure. Chicago was the leader to the upside again this week, up 3 ½ cents (0.65%). Kansas City was back down 5 ¾ cents (1.03%). Minneapolis spring wheat slipped back 5 ¼ cents. Monday’s Crop Progress report indicated that the winter wheat harvest was 88% complete by August 4, 2% above the average pace. The spring wheat crop was 97% headed, with 6% listed as harvested and lagging the 10% average. Spring wheat conditions were unchanged and 1 point lower to 380 on the Brugler500 index. Export Sales data showed 24/25 sales slipping back again to just 273,980 MT sold in the week that ended on 8/1 Census data pegged wheat exports at 1.47 MMT in June, well above last year’s total. Friday’s Commitment of Traders report showed CBT wheat spec traders cutting back 6,284 contracts to their net short to 71,332 contracts as of August 6. In KC wheat, they covered 4,154 contracts of their net short to 36,308 contracts as of Tuesday.
Soybeans got very little help this week, as September was down 29 ¼ and settled the week below $10. New crop November was down 24 ¾ cents. Weakness was mainly from the soybean meal, with Sep down $22. September bean oil was up 74 points. Weekly Crop Progress data showed 86% of the US soybean acreage blooming and 59% setting pods, both above the 5-year average. Condition ratings were back up 1% from the week prior at 68% gd/ex, as the Brugler500 index was 2 points higher at 372. This week’s Export Sales report showed bookings slipping for old crop beans to 305,423 MT in the week that ended on August 1. New crop business improved to 985,206 MT. Soybean exports in June totaled 1.34 MMT, well above last year’s total. CFTC data showed managed money cutting back 9,575 contracts from their net short as of Tuesday August 2 at 169,016 contracts.
Live cattle managed to show a weekly loss of just 92 cents in the October contract that week, as early losses were parred back by the Friday strength. Cash trade slipped back this week with sales of $185-186 in the south, and northern trade at $193, both down $2-3 from last week. Feeders were down another $6.55 since last Friday. The CME Feeder Cattle Index was down $8.01 week/week to $249.71. Wholesale boxed beef prices were mixed on the week, as choice boxes were down $1.06 at $312.71, while Select was $1.42 higher to $298.59. Weekly beef production was down 0.4% from last week and 0.6% above the same week last year at 496.9 million lbs. That left the YTD beef production down 1.4% from the same time a year ago, with cattle slaughter down 4.3%. Beef exports converted from Census data on a tonnage basis to a carcass basis showed 263.5 million lbs shipped in June. This week’s Commitment of Traders report pegged the managed money spec traders slashing their net long in live cattle by 21,911 contracts to 53,802 contracts net long as of August 6.
Hogs pulled back again this week was October was down $2.60. The CME Lean Hog Index was back down 73 cents this week at $92.80 as of August 7. USDA’s Pork Carcass Cutout fell back $5.65 (5.4%) this week to $98.66. The belly was the leader on the week, down $22.79, with the picnic the only primal to be reported higher. Weekly pork production was back down 3.5% from last week, but 2.3% larger than the same week last year at 501 million lbs. YTD hog slaughter has run 1.2% above last year, with pork production 1.4% higher. Census data converted to a carcass basis showed pork exports at 524.1 million lbs during June. Lean hog spec traders were busy adding a few contracts to their net long position in the week ending on August 6, by 3,957 contracts of futures and options by last Tuesday to a net long 10,101 contracts.
Cotton was up just 9 points in the December contract this week. Crop Progress data pegged 91% of the US cotton crop squared with 60% setting bolls, both ahead of normal. There was also 8% of the crop that had bolls open by August 4. Condition ratings dropped 4% lower to 45% gd/ex, with the Brugler500 index at 314, another 13 point drop. USDA’s Export Sales report showed net reductions of 949,600 RB for 2024/25 in the week that ended on August 1. That was mainly due to cancellations of 603,200 RB to China, 372,200 RB to Pakistan and 111,800 RB to Vietnam on the shift to the new market year. Between forward sales and old crop carried over, there are 4.102 million RB in 2024/25 sales on the books. Actual shipments were reported at 738,075 MT for the old crop to round out the MY at 11.07 million RB. Census data pegged cotton exports at just 826,342 bales during June, excluding linters. That was the lowest since November of last year and a 10- year low for June. The FSA raised the Adjusted World Price for cotton by 130 points on Thursday, to 55.24 cents/lb. Weekly data from CFTC showed managed money spec funds in cotton futures and options adding another 5,583 contracts to their now record net short as of August 6. By that Tuesday they were net short 52,204 contracts.
Market Watch
We start out next week with the Monday morning Export Inspections report, as the weekly Crop Progress report will be out that afternoon. Monday is also USDA’s update to the Crop Production and WASDE reports. On Tuesday, PPI data will be released, with CPI out on Wednesday. Also on Wednesday, EIA will release their Weekly Petroleum Status Report, including an ethanol production and stocks update. August soybean and product futures, as well as lean hog futures and options will expire at midweek Export Sales data will be released on Thursday morning, with NOPA data also released that day.
See Page 4 for Tech Talk!
Tech Talk: December Corn
December corn is having a tough time gaining any upward momentum. After spiking the round number support of $4 last week, it looked like it may put up a fight and hold. However, after a test of the Bollinger midline at $4.07 and a downtrend line at $4.01 ¼, the bulls threw in the towel on that number. They posted a new low at $3.935 on Friday and closed within 1 ½ cents of it. There is not s stich of wind in the bulls’ sails and support is near the lower BB at $3.925. There is some hope that the 2X Fib expansion off the Feb low to May high can hold but don’t bet the farm on it… Stochastics are near oversold with RSI in that area, which could argue for a bounce around Monday’s crop report. But they’re going to need some assistance from Uncle Sam.
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.
Stuck in the Mud. Ag Marketing Report 08/12/2024
If you’ve ever driven on a minimum maintenance road right after the rain, or went to check on a pivot only to realize it stopped moving, you likely know how frustrating it can be to be stuck in the mud. Now, there can be several different causes as to why you got stuck in the first place. Whether that is a broken gearbox (or flat tire) on the pivot, or that you forgot to lock in the four wheel drive. Whatever the reason, the feeling of immediate regret is one that a person can live without. In terms of market action for the grains, the bulls have got bogged down pretty deep recently. And despite all their efforts, it seems all they are doing is spinning their tires. Just like that old saying goes, if at some point you are deep enough in a hole, you should probably stop digging. Of course, it doesn’t necessarily help when the bears are assisting with a backhoe!
Corn futures were spinning their tires all week and failed several times at an early session rally to close with September down 9 ¾ cents (2.52%) this week. December was down 8 ¼ cents. Crop Progress data indicated 88% of the US corn crop silking by August 4, with 46% of US corn acres in the dough stage and 7% dented, running ahead of normal pace. Condition ratings were back down 1% to 67% gd/ex, with the Brugler500 index 2 points lower to 370. Ethanol production, and thus corn use, pulled back from last week’s record to 1.067 million barrels per day in the week that ended on August 2, a 42,000 bpd drop on the week according to the EIA. Stocks saw a decrease of 206,000 barrels to 23.767 million barrels. Thursday’s Export Sales report indicated old crop corn bookings at 485,447 MT in the week ending on August 1. New crop sales were light at 249,062 MT in that week. Census showed June corn export shipments at 5.5 MMT, the larges for the month in 3 years. Ethanol exports from the US in June were a monthly record 145.9 million gallons. The weekly Commitment of traders released from CFTC indicated spec traders in the corn market covering more shorts during the week that ended on August 6, by 52,551 contracts. That left them with a still large net short of 242,545 contracts by that Tuesday.
Wheat was mixed across the three markets this week with the hard red varieties feeling some pressure. Chicago was the leader to the upside again this week, up 3 ½ cents (0.65%). Kansas City was back down 5 ¾ cents (1.03%). Minneapolis spring wheat slipped back 5 ¼ cents. Monday’s Crop Progress report indicated that the winter wheat harvest was 88% complete by August 4, 2% above the average pace. The spring wheat crop was 97% headed, with 6% listed as harvested and lagging the 10% average. Spring wheat conditions were unchanged and 1 point lower to 380 on the Brugler500 index. Export Sales data showed 24/25 sales slipping back again to just 273,980 MT sold in the week that ended on 8/1 Census data pegged wheat exports at 1.47 MMT in June, well above last year’s total. Friday’s Commitment of Traders report showed CBT wheat spec traders cutting back 6,284 contracts to their net short to 71,332 contracts as of August 6. In KC wheat, they covered 4,154 contracts of their net short to 36,308 contracts as of Tuesday.
Soybeans got very little help this week, as September was down 29 ¼ and settled the week below $10. New crop November was down 24 ¾ cents. Weakness was mainly from the soybean meal, with Sep down $22. September bean oil was up 74 points. Weekly Crop Progress data showed 86% of the US soybean acreage blooming and 59% setting pods, both above the 5-year average. Condition ratings were back up 1% from the week prior at 68% gd/ex, as the Brugler500 index was 2 points higher at 372. This week’s Export Sales report showed bookings slipping for old crop beans to 305,423 MT in the week that ended on August 1. New crop business improved to 985,206 MT. Soybean exports in June totaled 1.34 MMT, well above last year’s total. CFTC data showed managed money cutting back 9,575 contracts from their net short as of Tuesday August 2 at 169,016 contracts.
Live cattle managed to show a weekly loss of just 92 cents in the October contract that week, as early losses were parred back by the Friday strength. Cash trade slipped back this week with sales of $185-186 in the south, and northern trade at $193, both down $2-3 from last week. Feeders were down another $6.55 since last Friday. The CME Feeder Cattle Index was down $8.01 week/week to $249.71. Wholesale boxed beef prices were mixed on the week, as choice boxes were down $1.06 at $312.71, while Select was $1.42 higher to $298.59. Weekly beef production was down 0.4% from last week and 0.6% above the same week last year at 496.9 million lbs. That left the YTD beef production down 1.4% from the same time a year ago, with cattle slaughter down 4.3%. Beef exports converted from Census data on a tonnage basis to a carcass basis showed 263.5 million lbs shipped in June. This week’s Commitment of Traders report pegged the managed money spec traders slashing their net long in live cattle by 21,911 contracts to 53,802 contracts net long as of August 6.
Hogs pulled back again this week was October was down $2.60. The CME Lean Hog Index was back down 73 cents this week at $92.80 as of August 7. USDA’s Pork Carcass Cutout fell back $5.65 (5.4%) this week to $98.66. The belly was the leader on the week, down $22.79, with the picnic the only primal to be reported higher. Weekly pork production was back down 3.5% from last week, but 2.3% larger than the same week last year at 501 million lbs. YTD hog slaughter has run 1.2% above last year, with pork production 1.4% higher. Census data converted to a carcass basis showed pork exports at 524.1 million lbs during June. Lean hog spec traders were busy adding a few contracts to their net long position in the week ending on August 6, by 3,957 contracts of futures and options by last Tuesday to a net long 10,101 contracts.
Cotton was up just 9 points in the December contract this week. Crop Progress data pegged 91% of the US cotton crop squared with 60% setting bolls, both ahead of normal. There was also 8% of the crop that had bolls open by August 4. Condition ratings dropped 4% lower to 45% gd/ex, with the Brugler500 index at 314, another 13 point drop. USDA’s Export Sales report showed net reductions of 949,600 RB for 2024/25 in the week that ended on August 1. That was mainly due to cancellations of 603,200 RB to China, 372,200 RB to Pakistan and 111,800 RB to Vietnam on the shift to the new market year. Between forward sales and old crop carried over, there are 4.102 million RB in 2024/25 sales on the books. Actual shipments were reported at 738,075 MT for the old crop to round out the MY at 11.07 million RB. Census data pegged cotton exports at just 826,342 bales during June, excluding linters. That was the lowest since November of last year and a 10- year low for June. The FSA raised the Adjusted World Price for cotton by 130 points on Thursday, to 55.24 cents/lb. Weekly data from CFTC showed managed money spec funds in cotton futures and options adding another 5,583 contracts to their now record net short as of August 6. By that Tuesday they were net short 52,204 contracts.
Market Watch
We start out next week with the Monday morning Export Inspections report, as the weekly Crop Progress report will be out that afternoon. Monday is also USDA’s update to the Crop Production and WASDE reports. On Tuesday, PPI data will be released, with CPI out on Wednesday. Also on Wednesday, EIA will release their Weekly Petroleum Status Report, including an ethanol production and stocks update. August soybean and product futures, as well as lean hog futures and options will expire at midweek Export Sales data will be released on Thursday morning, with NOPA data also released that day.
See Page 4 for Tech Talk!
Tech Talk: December Corn
December corn is having a tough time gaining any upward momentum. After spiking the round number support of $4 last week, it looked like it may put up a fight and hold. However, after a test of the Bollinger midline at $4.07 and a downtrend line at $4.01 ¼, the bulls threw in the towel on that number. They posted a new low at $3.935 on Friday and closed within 1 ½ cents of it. There is not s stich of wind in the bulls’ sails and support is near the lower BB at $3.925. There is some hope that the 2X Fib expansion off the Feb low to May high can hold but don’t bet the farm on it… Stochastics are near oversold with RSI in that area, which could argue for a bounce around Monday’s crop report. But they’re going to need some assistance from Uncle Sam.
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.