Growing up, I went to my fair share of rodeos. As you would expect, one of the favorite events during my youth was bull riding, what some would consider the toughest sport on dirt. However, outside of the rough stock, the one event that always had my attention was steer wrestling, or what some would call bulldogging. The goal of the event, in short, is to essentially jump from your horse, at a near full gallop, onto a steer running alongside, gain control of its head, and twist until all four legs are off the ground. Easier said than done. The secret to all of this is head control. While the 500-600 pounds animal has a ton of power, maintaining control of its head essentially allows you to control the whole animal. This brings us to the market action this week… the market crowd has their form of bulldogging at the moment. The spec bears have full control of the bull’s head and are not giving up. That is especially true when you consider the fact that Monday’s USDA report was not as bearish as it could have been for corn and we still printed a new low on Friday.
Corn futures failed to follow through on Monday’s USDA report action, as September was down 6 ¼ cents. New crop December was down 2 ½ cents. USDA raised the US corn yield projection to 183.1 bpa on Monday, with acreage being cut by 0.7 million harvested acres and taking production up 47 mbu from July to 15.1 bbu. Stocks for new crop were cut to 2.073 bbu as demand was increased, and old crop stocks were trimmed by 10 mbu. Crop Progress data tallied 94% of the US corn crop silking by August 11, with 60% of US corn acres in the dough stage and 18% dented, running ahead of normal pace. Condition ratings were steady 67% gd/ex, with the Brugler500 index at 370. Ethanol production, and thus corn use, was up just slightly to 1.072 million barrels per day in the week that ended on August 9, according to the EIA. Stocks saw a decrease of 413,000 barrels to 23.354 million barrels. Thursday’s Export Sales report indicated old crop corn bookings at just 120,477 MT in the week ending on August 8, a MY low. New crop sales were a MY high at 800,518 MT in that week. The weekly Commitment of traders released from CFTC indicated spec traders in the corn market adding back 6,462 contracts to their net short position in the week that ended on August 13, to 249,007 contracts by that Tuesday.
Wheat was mixed across the three markets this week with the winter wheats feeling some pressure. Kansas City was the leader to the downside this week, down 14 ¼ cents (2.57%). Chicago was back down 12 ½ cents (2.30%). Minneapolis spring wheat was the long higher market, up 3 ¼ cents in the September contract. Production was cut a total of 26 mbu on Monday, with most of that via spring wheat, down 34 mbu on an acreage cut. Winter wheat production was up 20 mbu via HRW and white. That helped stocks to be cut 28 mbu to 828 mbu. Monday’s Crop Progress report indicated that the winter wheat harvest was 93% complete by August 11, 2% above the average pace. The spring wheat crop was 18% harvested and lagging the 21% average. Spring wheat conditions were down 2% to 72% gd/ex, as the Brugler500 index was down 1 point to 379. Export Sales data showed 24/25 sales higher this week to 339,925 MT in the week that ended on 8/8. Friday’s Commitment of Traders report showed CBT wheat spec traders adding back 1,956 contracts to their net short to 73,288 contracts as of August 13. In KC wheat, they covered another 3,214 contracts of their net short to 32,824 contracts as of Tuesday.
Soybeans collapsed this week, as USDA painted a pretty bearish picture on Monday. September was down 50 cents (5.06%), as new crop November was down another 45 ½ cents (4.54%). Pressure came also via weakness from the products, as soybean meal was down another $8.30/ton, September bean oil 247 points lower. USDA raised yield to 53.2 bpa on Monday, with acreage up 1 million acres as well, taking production up 154 mbu to 4.589 bbu. Demand was offset but just 29 mbu, as stocks were up 125 mbu to 560 mbu. Weekly Crop Progress data showed 91% of the US soybean acreage blooming and 72% setting pods, both above the 5-year average. Condition ratings were steady at 68% gd/ex, as the Brugler500 index was 1 point lower at 371. NOPA reported July crush among its members at 182.88 mbu, a record for the month. This week’s Export Sales report showed bookings slipping for old crop beans to 221,715 MT in the week that ended on August 8. New crop business improved to 1.344 MMT. CFTC data showed managed money adding back another 5,431 contracts to their net short as of Tuesday August 13 at 174,447 contracts.
Live cattle started out the week a little stronger, but finished weaker with October down $2.85 on the week. Cash trade slipped back again this week with sales of $185 in the south, steady to $2 lower, and northern trade at $190, down $3 from last week. Feeders were down another $2.10 since last Friday. The CME Feeder Cattle Index was down $3 week/week to $246.71. Wholesale boxed beef prices were back higher on the week, as choice boxes were up $4.75 at $317.46, while Select was $4 higher to $302.59. Weekly beef production was up 2% from last week and 0.1% above the same week last year at 509.9 million lbs. That left the YTD beef production down 1.3% from the same time a year ago, with cattle slaughter down 4.2%. In the monthly WASDE update, USDA raised expected beef production for 2024 by 81 million lbs to 26.736 billion. Beef export sales totaled 28,122 MT, a calendar year high for sales. Actual shipments totaled a 16-week low of 14,114 MT. Commitment of Traders data indicated spec longs liquidating in the week that ended on August 13 by 8,910 contracts to a net long 44,892 contracts by that Tuesday.
Hogs were one of the few areas with strength, as October was up $1.10. The CME Lean Hog Index was back down $2.60 this week at $90.02 as of August 14. USDA’s Pork Carcass Cutout was up just a penny this week to $98.67. The belly was the leader to the upside on the week, $8.94 higher, with the rib up $8. The ham was down $8.52. Weekly pork production was back up 5.1% from last week and the same week last year at 529.1 million lbs. YTD hog slaughter has run 1.3% above last year, with pork production 1.5% higher. This month’s WASDE update showed US pork production at 24.048 billion lbs in 2024, a 91 million lb drop from last month. Export Sales data showed 28,682 MT of pork sales in the week that ended on August 8, a calendar year low. Shipments were 7 week low at 28,821 MT. Specs in lean hog futures and options flipped back to a net short position by August 13 by 12,370 contracts to a net short of 2,269 contracts.
Cotton was back down 110 points in the December contract this week. Crop Production data showed 11.17 million acres for cotton this year, with harvested acreage at 8.63 million. Yield was slightly lower but the larger abandonment dropped production by 1.89 million bales to 15.11 million bales. Stocks were up 100,000 bales for 2023/24, with new crop down 800,000 bales to 4.5 million on the lower production. Crop Progress data showed 96% of the US cotton crop squared with 74% setting bolls, both ahead of normal. There was also 13% of the crop that had bolls open by August 11. Condition ratings were up 1% lower to 46% gd/ex, with the Brugler500 index at 319, back up 5 points. USDA’s Export Sales report showed 2024/25 sales at 110,946 RB in the week that ended on August 8. Actual shipments were reported at 131,271 RB for the first week of the MY. The FSA raised the Adjusted World Price for cotton by 11 points on Thursday, to 55.35 cents/lb. Weekly data from CFTC showed managed money spec funds in cotton futures and options trimming another 2,570 contracts from their previously record net short as of August 13. By that Tuesday they were net short 49,4 54 contracts.
Market Watch
Next week starts with the Monday morning Export Inspections report, as the weekly Crop Progress report will be out that afternoon. Fast forward to Wednesday and the EIA will release their Weekly Petroleum Status Report, showing an ethanol production and stocks update. Export Sales data will be released on Thursday morning. On Friday, September grain options will expire, with NASS releasing the monthly Cattle on Feed and Cold Storage reports that afternoon.
See Page 4 for Tech Talk!
Tech Talk: November Soybeans
November soybeans have had a very unfortunate yet orderly decline since back in May. The regression channel has upper boundary resistance at $10.14, with the lower boundary support at $9.45 ½ cents. ADX is confirming the downtrend, at 51, with MACD regaining the bearish momentum. The market is very oversold but normally in a trending market, that doesn’t matter. Support comes from the 2.618X Fib expansion at $9.48 ¼. Resistance on a bounce would be the upper regression channel or the Bollinger midline at $10.14 ¼.
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.
Bulldoggin’. Ag Marketing Report 08/20/2024
Growing up, I went to my fair share of rodeos. As you would expect, one of the favorite events during my youth was bull riding, what some would consider the toughest sport on dirt. However, outside of the rough stock, the one event that always had my attention was steer wrestling, or what some would call bulldogging. The goal of the event, in short, is to essentially jump from your horse, at a near full gallop, onto a steer running alongside, gain control of its head, and twist until all four legs are off the ground. Easier said than done. The secret to all of this is head control. While the 500-600 pounds animal has a ton of power, maintaining control of its head essentially allows you to control the whole animal. This brings us to the market action this week… the market crowd has their form of bulldogging at the moment. The spec bears have full control of the bull’s head and are not giving up. That is especially true when you consider the fact that Monday’s USDA report was not as bearish as it could have been for corn and we still printed a new low on Friday.
Corn futures failed to follow through on Monday’s USDA report action, as September was down 6 ¼ cents. New crop December was down 2 ½ cents. USDA raised the US corn yield projection to 183.1 bpa on Monday, with acreage being cut by 0.7 million harvested acres and taking production up 47 mbu from July to 15.1 bbu. Stocks for new crop were cut to 2.073 bbu as demand was increased, and old crop stocks were trimmed by 10 mbu. Crop Progress data tallied 94% of the US corn crop silking by August 11, with 60% of US corn acres in the dough stage and 18% dented, running ahead of normal pace. Condition ratings were steady 67% gd/ex, with the Brugler500 index at 370. Ethanol production, and thus corn use, was up just slightly to 1.072 million barrels per day in the week that ended on August 9, according to the EIA. Stocks saw a decrease of 413,000 barrels to 23.354 million barrels. Thursday’s Export Sales report indicated old crop corn bookings at just 120,477 MT in the week ending on August 8, a MY low. New crop sales were a MY high at 800,518 MT in that week. The weekly Commitment of traders released from CFTC indicated spec traders in the corn market adding back 6,462 contracts to their net short position in the week that ended on August 13, to 249,007 contracts by that Tuesday.
Wheat was mixed across the three markets this week with the winter wheats feeling some pressure. Kansas City was the leader to the downside this week, down 14 ¼ cents (2.57%). Chicago was back down 12 ½ cents (2.30%). Minneapolis spring wheat was the long higher market, up 3 ¼ cents in the September contract. Production was cut a total of 26 mbu on Monday, with most of that via spring wheat, down 34 mbu on an acreage cut. Winter wheat production was up 20 mbu via HRW and white. That helped stocks to be cut 28 mbu to 828 mbu. Monday’s Crop Progress report indicated that the winter wheat harvest was 93% complete by August 11, 2% above the average pace. The spring wheat crop was 18% harvested and lagging the 21% average. Spring wheat conditions were down 2% to 72% gd/ex, as the Brugler500 index was down 1 point to 379. Export Sales data showed 24/25 sales higher this week to 339,925 MT in the week that ended on 8/8. Friday’s Commitment of Traders report showed CBT wheat spec traders adding back 1,956 contracts to their net short to 73,288 contracts as of August 13. In KC wheat, they covered another 3,214 contracts of their net short to 32,824 contracts as of Tuesday.
Soybeans collapsed this week, as USDA painted a pretty bearish picture on Monday. September was down 50 cents (5.06%), as new crop November was down another 45 ½ cents (4.54%). Pressure came also via weakness from the products, as soybean meal was down another $8.30/ton, September bean oil 247 points lower. USDA raised yield to 53.2 bpa on Monday, with acreage up 1 million acres as well, taking production up 154 mbu to 4.589 bbu. Demand was offset but just 29 mbu, as stocks were up 125 mbu to 560 mbu. Weekly Crop Progress data showed 91% of the US soybean acreage blooming and 72% setting pods, both above the 5-year average. Condition ratings were steady at 68% gd/ex, as the Brugler500 index was 1 point lower at 371. NOPA reported July crush among its members at 182.88 mbu, a record for the month. This week’s Export Sales report showed bookings slipping for old crop beans to 221,715 MT in the week that ended on August 8. New crop business improved to 1.344 MMT. CFTC data showed managed money adding back another 5,431 contracts to their net short as of Tuesday August 13 at 174,447 contracts.
Live cattle started out the week a little stronger, but finished weaker with October down $2.85 on the week. Cash trade slipped back again this week with sales of $185 in the south, steady to $2 lower, and northern trade at $190, down $3 from last week. Feeders were down another $2.10 since last Friday. The CME Feeder Cattle Index was down $3 week/week to $246.71. Wholesale boxed beef prices were back higher on the week, as choice boxes were up $4.75 at $317.46, while Select was $4 higher to $302.59. Weekly beef production was up 2% from last week and 0.1% above the same week last year at 509.9 million lbs. That left the YTD beef production down 1.3% from the same time a year ago, with cattle slaughter down 4.2%. In the monthly WASDE update, USDA raised expected beef production for 2024 by 81 million lbs to 26.736 billion. Beef export sales totaled 28,122 MT, a calendar year high for sales. Actual shipments totaled a 16-week low of 14,114 MT. Commitment of Traders data indicated spec longs liquidating in the week that ended on August 13 by 8,910 contracts to a net long 44,892 contracts by that Tuesday.
Hogs were one of the few areas with strength, as October was up $1.10. The CME Lean Hog Index was back down $2.60 this week at $90.02 as of August 14. USDA’s Pork Carcass Cutout was up just a penny this week to $98.67. The belly was the leader to the upside on the week, $8.94 higher, with the rib up $8. The ham was down $8.52. Weekly pork production was back up 5.1% from last week and the same week last year at 529.1 million lbs. YTD hog slaughter has run 1.3% above last year, with pork production 1.5% higher. This month’s WASDE update showed US pork production at 24.048 billion lbs in 2024, a 91 million lb drop from last month. Export Sales data showed 28,682 MT of pork sales in the week that ended on August 8, a calendar year low. Shipments were 7 week low at 28,821 MT. Specs in lean hog futures and options flipped back to a net short position by August 13 by 12,370 contracts to a net short of 2,269 contracts.
Cotton was back down 110 points in the December contract this week. Crop Production data showed 11.17 million acres for cotton this year, with harvested acreage at 8.63 million. Yield was slightly lower but the larger abandonment dropped production by 1.89 million bales to 15.11 million bales. Stocks were up 100,000 bales for 2023/24, with new crop down 800,000 bales to 4.5 million on the lower production. Crop Progress data showed 96% of the US cotton crop squared with 74% setting bolls, both ahead of normal. There was also 13% of the crop that had bolls open by August 11. Condition ratings were up 1% lower to 46% gd/ex, with the Brugler500 index at 319, back up 5 points. USDA’s Export Sales report showed 2024/25 sales at 110,946 RB in the week that ended on August 8. Actual shipments were reported at 131,271 RB for the first week of the MY. The FSA raised the Adjusted World Price for cotton by 11 points on Thursday, to 55.35 cents/lb. Weekly data from CFTC showed managed money spec funds in cotton futures and options trimming another 2,570 contracts from their previously record net short as of August 13. By that Tuesday they were net short 49,4 54 contracts.
Market Watch
Next week starts with the Monday morning Export Inspections report, as the weekly Crop Progress report will be out that afternoon. Fast forward to Wednesday and the EIA will release their Weekly Petroleum Status Report, showing an ethanol production and stocks update. Export Sales data will be released on Thursday morning. On Friday, September grain options will expire, with NASS releasing the monthly Cattle on Feed and Cold Storage reports that afternoon.
See Page 4 for Tech Talk!
Tech Talk: November Soybeans
November soybeans have had a very unfortunate yet orderly decline since back in May. The regression channel has upper boundary resistance at $10.14, with the lower boundary support at $9.45 ½ cents. ADX is confirming the downtrend, at 51, with MACD regaining the bearish momentum. The market is very oversold but normally in a trending market, that doesn’t matter. Support comes from the 2.618X Fib expansion at $9.48 ¼. Resistance on a bounce would be the upper regression channel or the Bollinger midline at $10.14 ¼.
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.