The market got off to a hot start for the month of September. The first Tuesday out of Labor Day saw some sharp gains across the ag commodities. And then the lug nuts began to come loose. The livestock was the first to fall off this week’s bull wagon. The grains kept up for much of the week. However, just like an athlete that hasn’t touched top gear in a while the bulls got winded pretty fast. The rally that started last week had an abrupt halt, with much of the pressure coming on Thursday and Friday. It seems the bulls are out of shape. Now comes the true test, as any coach would say. Do the bulls fight through the adversity, or go back in for a rest?
Corn futures got off to a hot start this week, but saw the gains muted on Friday’s weakness, December was up 5 ¼ cents (1.31%). The weekly Crop Progress report tallied 58% of the US corn crop as dented but September 1, with 19% listed as mature. NASS pegged condition ratings unchanged at 65% gd/ex, with the Brugler500 index back up 1 point to 364. The weekly EIA report showed ethanol production down 10,000 barrels per day to 1.061 million barrels per day in the week that ended on August 30. Stocks saw a 218,000 barrel draw to 23.354 million barrels. Monthly Grains Crushing data from NASS showed 473.5 mbu of corn used in ethanol production during July, up 4.01% from last year. The weekly Export Sales report showed new crop sales totaling another MY high at 1.822 MMT in that week. July corn exports totaled 5.26 MMT according to Census data, more than double July 2023. Commitment of Traders data showed managed money in corn futures and options slashing 65,697 contracts from their net short position in the week that ended on September 3, to 176,211 contracts by that Tuesday.
Wheat continued their climb this week, across all three exchanges. Kansas City December was up another 12 ¼ cents (2.17%). December Chicago was the leader, up 15 ½ cents (2.81%). Minneapolis spring wheat was anther 13 ¼ cents higher (2.21%) in December. This week’s Crop Progress report showed the spring wheat harvest at 70% complete by September 1. The winter wheat crop was reported at 2% plated by last Sunday. Export Sales data showed 24/25 sales backing off this week to 340,032 MT in the week that ended on 8/29. July wheat export shipments totaled 1.959 MMT according to Census data, 33.63% above June and 12.6% larger than the same month last year. Friday’s Commitment of Traders report showed CBT wheat spec traders cutting back 13,578 contracts from their net short to 42,624 contracts as of September 3. In KC wheat, they trimmed 4,765 contracts from their net short at 27,237 contracts as of Tuesday.
Soybeans managed to pull out a 5 cent gain on the week despite a strong start. Meal bulls did their part to help push things higher, up $10.70/ton. Bean oil was the pressure point, down 232 points. NASS Crop Progress data showed 94% of the US soybean acreage setting pods, with 13% now dropping leaves as of last Sunday. Condition ratings slipped 2% to 65% gd/ex, as the Brugler500 index was 4 point lower at 365. Fats & Oils data showed July soybean crush at 193.4 million bushels, 5.32% above June and 4.66% above last year’s record. The weekly Export Sales report showed new crop business slipping back to 1.66 MMT, down from last week’s MY high, taking the forward sales to 11.82 MMT. Census data showed soybean exports at 1.495 MMT during July, a 11.62% improvement from June and 17.04% above the July 2023 total. The weekly Commitment of Traders report showed soybean spec funds trimming back 22,455 contracts from to their net short as of Tuesday September 3 at 154,096 contracts.
Live cattle pulled back with some late pressure this week, down $3.425 (-1.92%). Cash trade saw some Southern action at $181 this week, with Northern trade at $180-183. Feeders were back down $6.175 in the September contract this week for a 02.57 loss. The CME Feeder Cattle Index was back down 46 cents week/week to $242.18. Wholesale boxed beef prices were back slightly higher on the week, as choice boxes were up 7 cents at $309.41, while Select was 30 cent higher to $296.12. Weekly beef production fell 11.1% from the previous non-holiday impacted week and was 0.3% below the same week last year at 460.6 million lbs. That left the YTD beef production down 1.2% from the same time a year ago, with cattle slaughter down 4.1%. Export Sales data showed bookings of 16,529 MT in the week of August 29, which was down from the week prior. Shipments were 14,905 MT in that week, which was a 4-week high. July beef exports totaled 257.6 million lbs, up from the year prior. Commitment of Traders data showed cattle specs adding just 44 contracts to their net long at 38,058 contracts, with the feeder cattle net short trimming by 1,972 contracts to 556 contracts as of September 3.
Hog bulls were on vacation this week, with October down $2.725 (-3.31%). The CME Lean Hog Index was down another 61 cents this week at $86.43 as of September 4. USDA’s Pork Carcass Cutout was down another $1.13 this week to $96.10. The loin, picnic, and ham primals were reported higher, with the belly leading the way to the downside, losing $9.45. Weekly pork production was down 4.1% from last week due to the holiday but up 4.9% from the same week last year at 488.9 million lbs. YTD hog slaughter has run 1.3% above last year, with pork production 1.7% higher. Pork export sales totaled 20,841 MT in the week that ended on August 29, down 50.7% from last week. July export shipments totaled 566.6 million lbs, a record for the month. Specs in lean hog futures and options added another 10,399 contracts to their net long position as of 9/3 to a net long 39,060 contracts.
Cotton futures fell apart on Friday, taking the weekly loss to 211 points (3.01%). This week’s Crop Progress data showed 95% of the US cotton crop setting bolls, with 37% of the bolls open by 9/1. Condition ratings were 4% higher to 44% gd/ex, with the Brugler500 index back up 9 points at 315. Export Sales data showed upland cotton sales of 207,512 RB in the week ending on August 29, the largest so far this short marketing year. Actual shipments were 164,147 RB in that week. Census data showed July cotton exports (excluding linters) at 773,848 bales, the lowest monthly total since last November and the lowest July total since 2015. The FSA raised the Adjusted World Price for cotton by 29 points on Thursday, to 57.27 cents/lb. Weekly data from CFTC showed managed money spec funds in cotton futures and options cutting 2,643 contracts from their net short as of September 6. By that Tuesday they were net short 42,665 contracts.
Market Watch
We start next week with a normal schedule as the weekly Export Inspections report will be released on Monday. The Crop Progress report will be out that afternoon. Skip ahead to Wednesday and EIA will release their Weekly Petroleum Status Report, showing ethanol production and stocks. CPI data will also be released on Wednesday, with PPI out on Thursday. USDA will be busy on Thursday, with the weekly Export Sales report in the morning and the monthly Crop Production, WASDE, and Cotton Ginning reports that morning. Finally on Friday, September grain futures will expire.
Tech Talk: December Corn
There are several key things to be looking for on December corn. First, we are at fairly stiff resistance via the 1/3 speedline of $4.135. That combined with the 60-day exponential moving average at $4.15 ¾ put a stop to the rally this week. We did have a breakout above the declining regression channel, Bollinger midline (now support at $3.985), and round number resistance at $4. However, we are failing so far on a breakout here. The overbought oscillators do argue for a pullback and were likely a cause for the Friday losses. Should the market be given more reason at short covering, and we do get a break out, the 38.2% Fib retracement resistance is at $4.275. One reason to suggest we try for that is that the DMI+ (positive momentum) is above the DMI- for the first tie since May. That does signal a reversal in trend, as well as a bullish MACD on a rising ADX. Round number $4 and the Bollinger midline are support on a pullback.
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. All rights reserved.
Out of Shape. Ag Marketing Report 09/09/2024
The market got off to a hot start for the month of September. The first Tuesday out of Labor Day saw some sharp gains across the ag commodities. And then the lug nuts began to come loose. The livestock was the first to fall off this week’s bull wagon. The grains kept up for much of the week. However, just like an athlete that hasn’t touched top gear in a while the bulls got winded pretty fast. The rally that started last week had an abrupt halt, with much of the pressure coming on Thursday and Friday. It seems the bulls are out of shape. Now comes the true test, as any coach would say. Do the bulls fight through the adversity, or go back in for a rest?
Corn futures got off to a hot start this week, but saw the gains muted on Friday’s weakness, December was up 5 ¼ cents (1.31%). The weekly Crop Progress report tallied 58% of the US corn crop as dented but September 1, with 19% listed as mature. NASS pegged condition ratings unchanged at 65% gd/ex, with the Brugler500 index back up 1 point to 364. The weekly EIA report showed ethanol production down 10,000 barrels per day to 1.061 million barrels per day in the week that ended on August 30. Stocks saw a 218,000 barrel draw to 23.354 million barrels. Monthly Grains Crushing data from NASS showed 473.5 mbu of corn used in ethanol production during July, up 4.01% from last year. The weekly Export Sales report showed new crop sales totaling another MY high at 1.822 MMT in that week. July corn exports totaled 5.26 MMT according to Census data, more than double July 2023. Commitment of Traders data showed managed money in corn futures and options slashing 65,697 contracts from their net short position in the week that ended on September 3, to 176,211 contracts by that Tuesday.
Wheat continued their climb this week, across all three exchanges. Kansas City December was up another 12 ¼ cents (2.17%). December Chicago was the leader, up 15 ½ cents (2.81%). Minneapolis spring wheat was anther 13 ¼ cents higher (2.21%) in December. This week’s Crop Progress report showed the spring wheat harvest at 70% complete by September 1. The winter wheat crop was reported at 2% plated by last Sunday. Export Sales data showed 24/25 sales backing off this week to 340,032 MT in the week that ended on 8/29. July wheat export shipments totaled 1.959 MMT according to Census data, 33.63% above June and 12.6% larger than the same month last year. Friday’s Commitment of Traders report showed CBT wheat spec traders cutting back 13,578 contracts from their net short to 42,624 contracts as of September 3. In KC wheat, they trimmed 4,765 contracts from their net short at 27,237 contracts as of Tuesday.
Soybeans managed to pull out a 5 cent gain on the week despite a strong start. Meal bulls did their part to help push things higher, up $10.70/ton. Bean oil was the pressure point, down 232 points. NASS Crop Progress data showed 94% of the US soybean acreage setting pods, with 13% now dropping leaves as of last Sunday. Condition ratings slipped 2% to 65% gd/ex, as the Brugler500 index was 4 point lower at 365. Fats & Oils data showed July soybean crush at 193.4 million bushels, 5.32% above June and 4.66% above last year’s record. The weekly Export Sales report showed new crop business slipping back to 1.66 MMT, down from last week’s MY high, taking the forward sales to 11.82 MMT. Census data showed soybean exports at 1.495 MMT during July, a 11.62% improvement from June and 17.04% above the July 2023 total. The weekly Commitment of Traders report showed soybean spec funds trimming back 22,455 contracts from to their net short as of Tuesday September 3 at 154,096 contracts.
Live cattle pulled back with some late pressure this week, down $3.425 (-1.92%). Cash trade saw some Southern action at $181 this week, with Northern trade at $180-183. Feeders were back down $6.175 in the September contract this week for a 02.57 loss. The CME Feeder Cattle Index was back down 46 cents week/week to $242.18. Wholesale boxed beef prices were back slightly higher on the week, as choice boxes were up 7 cents at $309.41, while Select was 30 cent higher to $296.12. Weekly beef production fell 11.1% from the previous non-holiday impacted week and was 0.3% below the same week last year at 460.6 million lbs. That left the YTD beef production down 1.2% from the same time a year ago, with cattle slaughter down 4.1%. Export Sales data showed bookings of 16,529 MT in the week of August 29, which was down from the week prior. Shipments were 14,905 MT in that week, which was a 4-week high. July beef exports totaled 257.6 million lbs, up from the year prior. Commitment of Traders data showed cattle specs adding just 44 contracts to their net long at 38,058 contracts, with the feeder cattle net short trimming by 1,972 contracts to 556 contracts as of September 3.
Hog bulls were on vacation this week, with October down $2.725 (-3.31%). The CME Lean Hog Index was down another 61 cents this week at $86.43 as of September 4. USDA’s Pork Carcass Cutout was down another $1.13 this week to $96.10. The loin, picnic, and ham primals were reported higher, with the belly leading the way to the downside, losing $9.45. Weekly pork production was down 4.1% from last week due to the holiday but up 4.9% from the same week last year at 488.9 million lbs. YTD hog slaughter has run 1.3% above last year, with pork production 1.7% higher. Pork export sales totaled 20,841 MT in the week that ended on August 29, down 50.7% from last week. July export shipments totaled 566.6 million lbs, a record for the month. Specs in lean hog futures and options added another 10,399 contracts to their net long position as of 9/3 to a net long 39,060 contracts.
Cotton futures fell apart on Friday, taking the weekly loss to 211 points (3.01%). This week’s Crop Progress data showed 95% of the US cotton crop setting bolls, with 37% of the bolls open by 9/1. Condition ratings were 4% higher to 44% gd/ex, with the Brugler500 index back up 9 points at 315. Export Sales data showed upland cotton sales of 207,512 RB in the week ending on August 29, the largest so far this short marketing year. Actual shipments were 164,147 RB in that week. Census data showed July cotton exports (excluding linters) at 773,848 bales, the lowest monthly total since last November and the lowest July total since 2015. The FSA raised the Adjusted World Price for cotton by 29 points on Thursday, to 57.27 cents/lb. Weekly data from CFTC showed managed money spec funds in cotton futures and options cutting 2,643 contracts from their net short as of September 6. By that Tuesday they were net short 42,665 contracts.
Market Watch
We start next week with a normal schedule as the weekly Export Inspections report will be released on Monday. The Crop Progress report will be out that afternoon. Skip ahead to Wednesday and EIA will release their Weekly Petroleum Status Report, showing ethanol production and stocks. CPI data will also be released on Wednesday, with PPI out on Thursday. USDA will be busy on Thursday, with the weekly Export Sales report in the morning and the monthly Crop Production, WASDE, and Cotton Ginning reports that morning. Finally on Friday, September grain futures will expire.
Tech Talk: December Corn
There are several key things to be looking for on December corn. First, we are at fairly stiff resistance via the 1/3 speedline of $4.135. That combined with the 60-day exponential moving average at $4.15 ¾ put a stop to the rally this week. We did have a breakout above the declining regression channel, Bollinger midline (now support at $3.985), and round number resistance at $4. However, we are failing so far on a breakout here. The overbought oscillators do argue for a pullback and were likely a cause for the Friday losses. Should the market be given more reason at short covering, and we do get a break out, the 38.2% Fib retracement resistance is at $4.275. One reason to suggest we try for that is that the DMI+ (positive momentum) is above the DMI- for the first tie since May. That does signal a reversal in trend, as well as a bullish MACD on a rising ADX. Round number $4 and the Bollinger midline are support on a pullback.
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. All rights reserved.