This summer seem to give us a little nicer weather in term of temps. The hot days were limited, as I can count on one hand how many times our local weather reached triple digits. This was not only beneficial to us having more enjoyable summer days, but the crops apparently also liked it being not as hot during some key periods. However, as the months flipped to September the warmer days are taking up part of the cool fall weather. A quick look at the forecast tells me we’re supposed to see highs in the 70s this coming week, so maybe things are starting to cool off, though the 8-14 day outlook from NOAA is still a little warmer than normal. In terms of the market, the heat still seems to be on for the grain bulls in terms of waking up and extending the rally. They are faltering under pressure after the corn and beans crept above some psychological numbers via $4 and $10, though the winter wheat can’t seem to crack $6.
Corn futures couldn’t manage to hold the gains from previous weeks, as December was back down 11 1/2 cents (-2.78%). Monday’s Crop Progress report showed 85% of the US corn crop as dented by September 15, with 45% listed as mature. Harvest across the country was listed at 9% complete, faster than the 6% average. Condition ratings improved 1% to 65% gd/ex, with the Brugler500 index up 1 point at 365. Wednesday’s EIA report pegged ethanol production back down 31,000 barrels per day to 1.049 million barrels per day in the week that ended on September 13. Stocks were building by 71,000 barrels to 23.758 million barrels. Export Sales data indicated new crop sales totaling just 847,350 MT in the week ending on September 12. That took export commitments to 14.209 MMT, which is 24% of the US export forecast and lagging the average sales pace of 30% this early in the marketing year. Commitment of Traders data showed managed money in corn futures and options adding back 2,680 contracts to their net short position in the week that ended on September 17, to 134,814 contracts by that Tuesday.
Wheat retreated across all three exchanges this week, giving back nearly two weeks of gains. December Kansas City was the leader to the downside, losing 36 cents (-6%). Chicago December was back down 26 ¼ cents (-4.41%). Minneapolis spring wheat back 27 1/2 cents lower (-4.33%) in December. Monday’s Crop Progress report tallied the spring wheat harvest at 92% complete by September 15. The winter wheat crop was reported at 14% plated by last Sunday. Export Sales data indicated US exports are struggling to get the sales for 24/25 dropping this week to 246,327 MT in the week that ended on 9/12. That took export sale commitments to 11.093 MMT, which is a 4-year high, but just 49% of the USDA forecast for export and lagging the 52% average. Friday’s Commitment of Traders report showed CBT wheat spec traders cutting back another 4,364 contracts from their net short to 25,033 contracts as of September 17. In KC wheat, they took the net short position down 1,024 contracts to 17,486 contracts as of Tuesday.
Soybeans managed to eke out a slight 5 ¾ cent gain in November this week, with help from one side of the products. Bean oil was up 263 points (6.65%) on the week. Meal was down another $1.00/ton. The weekly Crop Progress report showed 44% of the US soybean crop dropping leaves as of last Sunday, with harvest 6% completed. NASS dropped condition ratings by another 1% to 65% gd/ex, as the Brugler500 index was down 3 to 362. The disappointment for the bulls this week came via the NOPA crush report, which tallied just 158 mbu of soybeans crushed among member in August, well short of the 171.3 mbu estimates. That may cause USDA to rethink their 2023/24 crush increase from the September WASDE. Thursday’s Export Sales report showed new crop business improving this week to 1.748 MMT, taking the forward sales to 15.993 MMT. That is 32% of USDA’s expected export total in their WASDE balance sheet, 10 percentage points back of the average pace. The weekly Commitment of Traders report showed soybean spec funds trimming another 8,186 contracts from to their net short as of Tuesday September 17 at 122,415 contracts.
Live cattle found another round of strength this week with October up $4.825 (2.72%). Cash trade saw some Southern action at $183 this week, with Northern trade at $184-185. Both regions were $1-3 stronger on the week. Feeders were assisted by the stronger fats and weaker corn inputs, as the October contract was another $4.77 higher this week for a 2% gain. The CME Feeder Cattle Index was back down just 6 cents week/week to $243.26. Wholesale boxed beef prices were down again this week, with Choice boxes dropping $4.72 at $300.19 and a brief drop below $300, while Select was $5.58 lower to $288.59. Weekly beef production was back down 1.4% from the previous week but 0.4% above the same week last year at 520.3 million lbs. That left the YTD beef production down 1.0% from the same time a year ago, with cattle slaughter down 4.0%. Beef export sales totaled 15,533 MT in the week that ended on September 12. Shipments totaled a 12-week high at 16,417 MT. Commitment of Traders data showed cattle specs trimming 359 contracts from their net long to 38,331 contracts, with the feeder cattle net short getting slashed by 1,950 contracts to just 79 contracts as of September 17.
Hog bulls were back to work this week, with October back up $3.775 (4.81%). The CME Lean Hog Index was down another 97 cents this week at $84.38 as of September 18. USDA’s Pork Carcass Cutout was up just 25 cents this week to $94.15. The rib primal was up $5.35 to lead the way with the loin and butt joining in on the gains. The picnic, belly, and ham were all lower. Weekly pork production was down 1.9% from last week and 0.6$ below the same week last year at 528.6 million lbs. YTD hog slaughter has run 1.2% above last year, with pork production 1.7% higher. Pork export sales during the week of September 12 totaled 28,957 MT, back down 2.6% from the week prior. Export shipments were at 31,350 MT in that week, a 6-week high. Specs in lean hog futures and options added another 2,003 contracts to their net long position as of 9/17 to a net long 39,715 contracts.
Cotton futures got some help from a limit gain to start the week, as December closed things out with 370-point gains (+5.7%). This week’s Crop Progress report showed 54% of the US cotton crop with bolls open by 9/15 and 10% of the crop harvested. Rains in the 7-day may slow things this upcoming week. Condition ratings were 1% lower to 39% gd/ex, with the Brugler500 index back up 2 points at 308. Export Sales data showed cotton bookings at 106,801 RB in the week that ended on September 12. That was a 4-week low, but slightly above the same week last year. Export shipments were 130,049 RB, which was back up 9.16% from the previous year. The FSA raised the Adjusted World Price for cotton by 283 points on Thursday, to 58.83 cents/lb. Weekly data from CFTC showed managed money spec funds in cotton futures and options slashing 18,974 contracts from their net short as of September 17. By that Tuesday they were net short 30,518 contracts.
Market Watch
Next week begins with the Export Inspections report on Monday morning and the weekly Crop Progress report out that afternoon. Tuesday is first notice day for October cotton. Skip ahead to Wednesday and EIA will release their Weekly Petroleum Status Report. On Thursday, USDA will release the weekly Export Sales report in the morning, with the monthly Cold Storage and quarterly Hogs & Pigs report from NASS out that afternoon. September feeder cattle futures and options also expire on Thursday. Finally on Friday, PCE data will be released in the morning.
Tech Talk: December Corn
December corn had a rough end to the week. After breaking above the 1/3 speedline last week, the market failed to push through the 60-day exponential moving average at $4.135 this week, and instead went back to test the speedline at $4.03 and the lower end of a fresh rising regression channel (lower end support at $4.04). Friday’s close at $4.01 ¾ was below both, as well as the 40-day moving average of $4.02 and Bollinger midline at $4.05 ¼. None of that would qualify as bullish. The last resort is round number $4. Now, there is an ascending triangle, with support at $4.035 (failing currently), with the resistance at $4.14 3/4. That could also be seen as a double top. If we can’t hold $4 and break below the intervening low of the double top at $3.97, there is a chance to test the August low at$3.85. The other alternative is the market is looking to close the weekly chart gap at $3.94 left from the September expiration before resuming the rally.
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 Heat is Still On. Ag Marketing Report 09/23/2024
This summer seem to give us a little nicer weather in term of temps. The hot days were limited, as I can count on one hand how many times our local weather reached triple digits. This was not only beneficial to us having more enjoyable summer days, but the crops apparently also liked it being not as hot during some key periods. However, as the months flipped to September the warmer days are taking up part of the cool fall weather. A quick look at the forecast tells me we’re supposed to see highs in the 70s this coming week, so maybe things are starting to cool off, though the 8-14 day outlook from NOAA is still a little warmer than normal. In terms of the market, the heat still seems to be on for the grain bulls in terms of waking up and extending the rally. They are faltering under pressure after the corn and beans crept above some psychological numbers via $4 and $10, though the winter wheat can’t seem to crack $6.
Corn futures couldn’t manage to hold the gains from previous weeks, as December was back down 11 1/2 cents (-2.78%). Monday’s Crop Progress report showed 85% of the US corn crop as dented by September 15, with 45% listed as mature. Harvest across the country was listed at 9% complete, faster than the 6% average. Condition ratings improved 1% to 65% gd/ex, with the Brugler500 index up 1 point at 365. Wednesday’s EIA report pegged ethanol production back down 31,000 barrels per day to 1.049 million barrels per day in the week that ended on September 13. Stocks were building by 71,000 barrels to 23.758 million barrels. Export Sales data indicated new crop sales totaling just 847,350 MT in the week ending on September 12. That took export commitments to 14.209 MMT, which is 24% of the US export forecast and lagging the average sales pace of 30% this early in the marketing year. Commitment of Traders data showed managed money in corn futures and options adding back 2,680 contracts to their net short position in the week that ended on September 17, to 134,814 contracts by that Tuesday.
Wheat retreated across all three exchanges this week, giving back nearly two weeks of gains. December Kansas City was the leader to the downside, losing 36 cents (-6%). Chicago December was back down 26 ¼ cents (-4.41%). Minneapolis spring wheat back 27 1/2 cents lower (-4.33%) in December. Monday’s Crop Progress report tallied the spring wheat harvest at 92% complete by September 15. The winter wheat crop was reported at 14% plated by last Sunday. Export Sales data indicated US exports are struggling to get the sales for 24/25 dropping this week to 246,327 MT in the week that ended on 9/12. That took export sale commitments to 11.093 MMT, which is a 4-year high, but just 49% of the USDA forecast for export and lagging the 52% average. Friday’s Commitment of Traders report showed CBT wheat spec traders cutting back another 4,364 contracts from their net short to 25,033 contracts as of September 17. In KC wheat, they took the net short position down 1,024 contracts to 17,486 contracts as of Tuesday.
Soybeans managed to eke out a slight 5 ¾ cent gain in November this week, with help from one side of the products. Bean oil was up 263 points (6.65%) on the week. Meal was down another $1.00/ton. The weekly Crop Progress report showed 44% of the US soybean crop dropping leaves as of last Sunday, with harvest 6% completed. NASS dropped condition ratings by another 1% to 65% gd/ex, as the Brugler500 index was down 3 to 362. The disappointment for the bulls this week came via the NOPA crush report, which tallied just 158 mbu of soybeans crushed among member in August, well short of the 171.3 mbu estimates. That may cause USDA to rethink their 2023/24 crush increase from the September WASDE. Thursday’s Export Sales report showed new crop business improving this week to 1.748 MMT, taking the forward sales to 15.993 MMT. That is 32% of USDA’s expected export total in their WASDE balance sheet, 10 percentage points back of the average pace. The weekly Commitment of Traders report showed soybean spec funds trimming another 8,186 contracts from to their net short as of Tuesday September 17 at 122,415 contracts.
Live cattle found another round of strength this week with October up $4.825 (2.72%). Cash trade saw some Southern action at $183 this week, with Northern trade at $184-185. Both regions were $1-3 stronger on the week. Feeders were assisted by the stronger fats and weaker corn inputs, as the October contract was another $4.77 higher this week for a 2% gain. The CME Feeder Cattle Index was back down just 6 cents week/week to $243.26. Wholesale boxed beef prices were down again this week, with Choice boxes dropping $4.72 at $300.19 and a brief drop below $300, while Select was $5.58 lower to $288.59. Weekly beef production was back down 1.4% from the previous week but 0.4% above the same week last year at 520.3 million lbs. That left the YTD beef production down 1.0% from the same time a year ago, with cattle slaughter down 4.0%. Beef export sales totaled 15,533 MT in the week that ended on September 12. Shipments totaled a 12-week high at 16,417 MT. Commitment of Traders data showed cattle specs trimming 359 contracts from their net long to 38,331 contracts, with the feeder cattle net short getting slashed by 1,950 contracts to just 79 contracts as of September 17.
Hog bulls were back to work this week, with October back up $3.775 (4.81%). The CME Lean Hog Index was down another 97 cents this week at $84.38 as of September 18. USDA’s Pork Carcass Cutout was up just 25 cents this week to $94.15. The rib primal was up $5.35 to lead the way with the loin and butt joining in on the gains. The picnic, belly, and ham were all lower. Weekly pork production was down 1.9% from last week and 0.6$ below the same week last year at 528.6 million lbs. YTD hog slaughter has run 1.2% above last year, with pork production 1.7% higher. Pork export sales during the week of September 12 totaled 28,957 MT, back down 2.6% from the week prior. Export shipments were at 31,350 MT in that week, a 6-week high. Specs in lean hog futures and options added another 2,003 contracts to their net long position as of 9/17 to a net long 39,715 contracts.
Cotton futures got some help from a limit gain to start the week, as December closed things out with 370-point gains (+5.7%). This week’s Crop Progress report showed 54% of the US cotton crop with bolls open by 9/15 and 10% of the crop harvested. Rains in the 7-day may slow things this upcoming week. Condition ratings were 1% lower to 39% gd/ex, with the Brugler500 index back up 2 points at 308. Export Sales data showed cotton bookings at 106,801 RB in the week that ended on September 12. That was a 4-week low, but slightly above the same week last year. Export shipments were 130,049 RB, which was back up 9.16% from the previous year. The FSA raised the Adjusted World Price for cotton by 283 points on Thursday, to 58.83 cents/lb. Weekly data from CFTC showed managed money spec funds in cotton futures and options slashing 18,974 contracts from their net short as of September 17. By that Tuesday they were net short 30,518 contracts.
Market Watch
Next week begins with the Export Inspections report on Monday morning and the weekly Crop Progress report out that afternoon. Tuesday is first notice day for October cotton. Skip ahead to Wednesday and EIA will release their Weekly Petroleum Status Report. On Thursday, USDA will release the weekly Export Sales report in the morning, with the monthly Cold Storage and quarterly Hogs & Pigs report from NASS out that afternoon. September feeder cattle futures and options also expire on Thursday. Finally on Friday, PCE data will be released in the morning.
Tech Talk: December Corn
December corn had a rough end to the week. After breaking above the 1/3 speedline last week, the market failed to push through the 60-day exponential moving average at $4.135 this week, and instead went back to test the speedline at $4.03 and the lower end of a fresh rising regression channel (lower end support at $4.04). Friday’s close at $4.01 ¾ was below both, as well as the 40-day moving average of $4.02 and Bollinger midline at $4.05 ¼. None of that would qualify as bullish. The last resort is round number $4. Now, there is an ascending triangle, with support at $4.035 (failing currently), with the resistance at $4.14 3/4. That could also be seen as a double top. If we can’t hold $4 and break below the intervening low of the double top at $3.97, there is a chance to test the August low at$3.85. The other alternative is the market is looking to close the weekly chart gap at $3.94 left from the September expiration before resuming the rally.
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.