This last week in the grain markets brought a few promising signs. All three of the major row crops, corn, soybeans, and wheat, closed above some respective resistance levels. The bulls have been challenged over the last couple months and failing nearly every test handed their way. Similar to my beloved Cornhuskers, with the win total in Vegas having the line set at 7.5 wins earlier this year, now the major talking heads are throwing out double digits for the win categories. We can talk all we want about how promising we look but we have to pass when put to the test. Much like Nebraska passed with flying colors last week vs. Colorado, the grains passed some speedlines this week. The true test comes next, in how we proceed from here.
Corn futures posted some Friday strength to round out the week, as December was up 7 cents (1.72%). The main story was shrugged off with the Friday move, as USDA raised yield by 0.5 bpato 183.6 bpa, with production up 39 mbu to 15.186 bbu. That was more than offset by a smaller 2023/24 carryover, cut 55 mbu due to larger exports and ethanol grind to 1.812 bbu. The new crop 2024/25 stocks were down 19 mbu to 2.057 bbu. The weekly Crop Progress report tallied 74% of the US corn crop as dented but September 1, with 29% listed as mature. There was also 5% listed as harvested. Condition ratings slipped 1% to 64% gd/ex, with the Brugler500 index steady at 364. The weekly EIA report showed ethanol production back up 19,000 barrels per day to 1.08 million barrels per day in the week that ended on September 6. Stocks saw a 360,000 barrel build to 23.714 million barrels. The weekly Export Sales report tallied new crop sales totaling just 666,458 MT in the week ending on September 5. Commitment of Traders data showed managed money in corn futures and options cutting another 44,077 contracts from their net short position in the week that ended on September 10, to 132,134 contracts by that Tuesday.
Wheat extended the rally this week, across all three exchanges. December Chicago was again the leader, up 27 ¾ cents (4.89%). Kansas City December was up another 22 ½ cents (3.90%). Minneapolis spring wheat was anther 21 ¾ cents higher (3.54 %) in December. Monthly WASDE data showed no change to the US balance sheet, with the 2024/25 US carryout left at 828 mbu. USDA increased the world stocks total by 0.6 MMT to 257.22 MMT, mainly on back revisions to Canada. This week’s Crop Progress report showed the spring wheat harvest at 85% complete by September 8. The winter wheat crop was reported at 6% plated by last Sunday. Export Sales data showed 24/25 sales improving this week to 475,875 MT in the week that ended on 9/5. Friday’s Commitment of Traders report showed CBT wheat spec traders cutting back another 13,227 contracts from their net short to 29,397 contracts as of September 10. In KC wheat, they trimmed 8,727 contracts from their net short at 18,510 contracts as of Tuesday.
Soybeans managed to pull out a 1 ¼ cent gain on the week, with pressure from the products preventing much of a breakout. Meal was back down $2.40/ton. Bean oil continued the weakness, down 68 points. NASS left yield unchanged at 53.2 bpa on Thursday, with production down just 3 mbu to 4.586 bbu. That, mixed with old crop stocks trimmed 5 mbu by an increase to crush, helped to push the new crop stocks total 10 mbu lower to 550 mbu. The weekly Crop Progress report showed 97% of the US soybean crop setting pods, with 25% now dropping leaves as of last Sunday. NASS left condition ratings alone at 65% gd/ex, as the Brugler500 index was unchanged at 365. The weekly Export Sales report showed new crop business slipping back to 1.474 MMT, down from last week’s MY high, taking the forward sales to 14.244 MMT. The weekly Commitment of Traders report showed soybean spec funds trimming back another 23,495 contracts from to their net short as of Tuesday September 10 at 130,601 contracts.
Live cattle found some strength this week with October up $2.47 (1.41%). Cash trade saw some Southern action at $180-182 this week, with Northern trade at $181-182. Both regions were steady to $1 stronger on the week. Feeders were the leaders, with the September contract $7.60 higher this week for a 3.24% gain. The CME Feeder Cattle Index was back up $1.14 week/week to $243.32. Wholesale boxed beef prices were down this week, with Choice boxes down $4.50 at $304.91 and the lowest in 4 months, while Select was $1.95 lower to $294.17. Weekly beef production was back up 14.5% from the previous holiday impacted week and was 1.1% above the same week last year at 527.4 million lbs. That left the YTD beef production down 1.1% from the same time a year ago, with cattle slaughter down 4.1%. Export Sales data showed beef sales of 11,411 MT, a 5-week low for bookings. Export shipments were the lowest for the marketing year at 11,830 MT. Commitment of Traders data showed cattle specs adding just 632 contracts to their net long at 38,690 contracts, with the feeder cattle net short increasing by 1,473 contracts to 2,029 contracts as of September 10.
Hog bulls extended their on vacation another week, with October down $1.05 (-1.32%). The CME Lean Hog Index was down another $1.08 this week at $85.35 as of September 11. USDA’s Pork Carcass Cutout was down another $2.20 this week to $963.90. All primals with exception to the picnic and belly were reported lower, with the ham down $7.91 and the driver to the downside. Weekly pork production was up 10.5% from last week due to the holiday and up 2.4% from the same week last year at 540 million lbs. YTD hog slaughter has run 1.3% above last year, with pork production 1.7% higher. Export Sales data pegged pork bookings at 29,738 MT in the week of 9/5, improving from the week prior. Shipments were back down to 25,722 MT, the lowest for a full week in the calendar year. Specs in lean hog futures and options trimmed back 1,348 contracts from their net long position as of 9/10 to a net long 37,712 contracts.
Cotton futures managed to pull out a 194 point (2.86%) gain on the week in the December contract. Crop Production data from Thursday showed acreage unchanged, with yield down 33 lbs/ac at 807 lbs. That helped to drop the production total by 596,000 bales to 14.512 million bales. Exports were trimmed by 200,000 bales with the overall stocks total down 500,000 bales to 4 million bales. USDA Cotton Ginnings data showed a total of 466,700 RB of cotton had been ginned by September 1, down 3.67% from the same time last year. Monday’s Crop Progress report showed 45% of the US cotton crop with bolls open by 9/8 and 8% of the crop harvested. Condition ratings were back 4% lower to 40% gd/ex, with the Brugler500 index back down 9 points at 306. Export Sales data showed upland cotton sales of 116,052 RB in the week ending on September 5. Actual shipments were 119,136 RB in that week. The FSA cut the Adjusted World Price for cotton by 127 points on Thursday, to 56 cents/lb. Weekly data from CFTC showed managed money spec funds in cotton futures and options adding back 6,827 contracts to their net short as of September 10. By that Tuesday they were net short 49,492 contracts.
Market Watch
Next week kicks off with the weekly Export Inspections report on Monday morning and the Crop Progress report out that afternoon. NOPA will also release their weekly crush report showing August soybean crush among members. Skip ahead to Wednesday and EIA will release their Weekly Petroleum Status Report, showing ethanol production and stocks. Wednesday will be a closely watched day as the Fed will released their decision on interest rates following their 2-day September meeting. USDA will be busy on Thursday, with the weekly Export Sales report in the morning. Finally on Friday, the monthly Cattle on Feed report from NASS will be released, with October serial grain options expiring that day.
Tech Talk: November Soybeans
November beans saw their tally attempt stall out this week. After breaking the 1/3 speedline resistance, they are now walking down the high side, even closing back below it on Tuesday. The Stochastics sell signal, you could argue as the reason for the pullback, with the 4-day RSI now in neutral. The speedline, as with $10 round number support has held now as support. However, bulls are struggling to break above the 40-day moving average at $10.08 ¼. Doing that would likely give more confirmation of August being an early ‘harvest’ low and suggest a test of the 38.2% Fib retracement resistance at $10.60.
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.
The True Test. Ag Marketing Report 09/16/2024
This last week in the grain markets brought a few promising signs. All three of the major row crops, corn, soybeans, and wheat, closed above some respective resistance levels. The bulls have been challenged over the last couple months and failing nearly every test handed their way. Similar to my beloved Cornhuskers, with the win total in Vegas having the line set at 7.5 wins earlier this year, now the major talking heads are throwing out double digits for the win categories. We can talk all we want about how promising we look but we have to pass when put to the test. Much like Nebraska passed with flying colors last week vs. Colorado, the grains passed some speedlines this week. The true test comes next, in how we proceed from here.
Corn futures posted some Friday strength to round out the week, as December was up 7 cents (1.72%). The main story was shrugged off with the Friday move, as USDA raised yield by 0.5 bpato 183.6 bpa, with production up 39 mbu to 15.186 bbu. That was more than offset by a smaller 2023/24 carryover, cut 55 mbu due to larger exports and ethanol grind to 1.812 bbu. The new crop 2024/25 stocks were down 19 mbu to 2.057 bbu. The weekly Crop Progress report tallied 74% of the US corn crop as dented but September 1, with 29% listed as mature. There was also 5% listed as harvested. Condition ratings slipped 1% to 64% gd/ex, with the Brugler500 index steady at 364. The weekly EIA report showed ethanol production back up 19,000 barrels per day to 1.08 million barrels per day in the week that ended on September 6. Stocks saw a 360,000 barrel build to 23.714 million barrels. The weekly Export Sales report tallied new crop sales totaling just 666,458 MT in the week ending on September 5. Commitment of Traders data showed managed money in corn futures and options cutting another 44,077 contracts from their net short position in the week that ended on September 10, to 132,134 contracts by that Tuesday.
Wheat extended the rally this week, across all three exchanges. December Chicago was again the leader, up 27 ¾ cents (4.89%). Kansas City December was up another 22 ½ cents (3.90%). Minneapolis spring wheat was anther 21 ¾ cents higher (3.54 %) in December. Monthly WASDE data showed no change to the US balance sheet, with the 2024/25 US carryout left at 828 mbu. USDA increased the world stocks total by 0.6 MMT to 257.22 MMT, mainly on back revisions to Canada. This week’s Crop Progress report showed the spring wheat harvest at 85% complete by September 8. The winter wheat crop was reported at 6% plated by last Sunday. Export Sales data showed 24/25 sales improving this week to 475,875 MT in the week that ended on 9/5. Friday’s Commitment of Traders report showed CBT wheat spec traders cutting back another 13,227 contracts from their net short to 29,397 contracts as of September 10. In KC wheat, they trimmed 8,727 contracts from their net short at 18,510 contracts as of Tuesday.
Soybeans managed to pull out a 1 ¼ cent gain on the week, with pressure from the products preventing much of a breakout. Meal was back down $2.40/ton. Bean oil continued the weakness, down 68 points. NASS left yield unchanged at 53.2 bpa on Thursday, with production down just 3 mbu to 4.586 bbu. That, mixed with old crop stocks trimmed 5 mbu by an increase to crush, helped to push the new crop stocks total 10 mbu lower to 550 mbu. The weekly Crop Progress report showed 97% of the US soybean crop setting pods, with 25% now dropping leaves as of last Sunday. NASS left condition ratings alone at 65% gd/ex, as the Brugler500 index was unchanged at 365. The weekly Export Sales report showed new crop business slipping back to 1.474 MMT, down from last week’s MY high, taking the forward sales to 14.244 MMT. The weekly Commitment of Traders report showed soybean spec funds trimming back another 23,495 contracts from to their net short as of Tuesday September 10 at 130,601 contracts.
Live cattle found some strength this week with October up $2.47 (1.41%). Cash trade saw some Southern action at $180-182 this week, with Northern trade at $181-182. Both regions were steady to $1 stronger on the week. Feeders were the leaders, with the September contract $7.60 higher this week for a 3.24% gain. The CME Feeder Cattle Index was back up $1.14 week/week to $243.32. Wholesale boxed beef prices were down this week, with Choice boxes down $4.50 at $304.91 and the lowest in 4 months, while Select was $1.95 lower to $294.17. Weekly beef production was back up 14.5% from the previous holiday impacted week and was 1.1% above the same week last year at 527.4 million lbs. That left the YTD beef production down 1.1% from the same time a year ago, with cattle slaughter down 4.1%. Export Sales data showed beef sales of 11,411 MT, a 5-week low for bookings. Export shipments were the lowest for the marketing year at 11,830 MT. Commitment of Traders data showed cattle specs adding just 632 contracts to their net long at 38,690 contracts, with the feeder cattle net short increasing by 1,473 contracts to 2,029 contracts as of September 10.
Hog bulls extended their on vacation another week, with October down $1.05 (-1.32%). The CME Lean Hog Index was down another $1.08 this week at $85.35 as of September 11. USDA’s Pork Carcass Cutout was down another $2.20 this week to $963.90. All primals with exception to the picnic and belly were reported lower, with the ham down $7.91 and the driver to the downside. Weekly pork production was up 10.5% from last week due to the holiday and up 2.4% from the same week last year at 540 million lbs. YTD hog slaughter has run 1.3% above last year, with pork production 1.7% higher. Export Sales data pegged pork bookings at 29,738 MT in the week of 9/5, improving from the week prior. Shipments were back down to 25,722 MT, the lowest for a full week in the calendar year. Specs in lean hog futures and options trimmed back 1,348 contracts from their net long position as of 9/10 to a net long 37,712 contracts.
Cotton futures managed to pull out a 194 point (2.86%) gain on the week in the December contract. Crop Production data from Thursday showed acreage unchanged, with yield down 33 lbs/ac at 807 lbs. That helped to drop the production total by 596,000 bales to 14.512 million bales. Exports were trimmed by 200,000 bales with the overall stocks total down 500,000 bales to 4 million bales. USDA Cotton Ginnings data showed a total of 466,700 RB of cotton had been ginned by September 1, down 3.67% from the same time last year. Monday’s Crop Progress report showed 45% of the US cotton crop with bolls open by 9/8 and 8% of the crop harvested. Condition ratings were back 4% lower to 40% gd/ex, with the Brugler500 index back down 9 points at 306. Export Sales data showed upland cotton sales of 116,052 RB in the week ending on September 5. Actual shipments were 119,136 RB in that week. The FSA cut the Adjusted World Price for cotton by 127 points on Thursday, to 56 cents/lb. Weekly data from CFTC showed managed money spec funds in cotton futures and options adding back 6,827 contracts to their net short as of September 10. By that Tuesday they were net short 49,492 contracts.
Market Watch
Next week kicks off with the weekly Export Inspections report on Monday morning and the Crop Progress report out that afternoon. NOPA will also release their weekly crush report showing August soybean crush among members. Skip ahead to Wednesday and EIA will release their Weekly Petroleum Status Report, showing ethanol production and stocks. Wednesday will be a closely watched day as the Fed will released their decision on interest rates following their 2-day September meeting. USDA will be busy on Thursday, with the weekly Export Sales report in the morning. Finally on Friday, the monthly Cattle on Feed report from NASS will be released, with October serial grain options expiring that day.
Tech Talk: November Soybeans
November beans saw their tally attempt stall out this week. After breaking the 1/3 speedline resistance, they are now walking down the high side, even closing back below it on Tuesday. The Stochastics sell signal, you could argue as the reason for the pullback, with the 4-day RSI now in neutral. The speedline, as with $10 round number support has held now as support. However, bulls are struggling to break above the 40-day moving average at $10.08 ¼. Doing that would likely give more confirmation of August being an early ‘harvest’ low and suggest a test of the 38.2% Fib retracement resistance at $10.60.
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.