One idiom we often hear of is ‘the calm before the storm,’ to describe a very chill pattern prior to a big event. However, this week in the markets has been anything but a ‘calm.’ December Corn had an average high-low daily range of 2.16% (9 cents) this week, with November soybeans an average daily range of 2.69% (28 ¼ cents). Considering we in the $4 and $10 area, that is a pretty impressive range. However, it seems as though the markets were getting a little restless, just like cattle tens to do as a cold front comes through. Well, there is the potential for a storm this next Monday in those markets, with the USDA releasing their September 1 stocks data. So the question for many will be, does the restlessness resemble a bull reaction ahead of the storm, or will the bears show up? Stay Tuned!
Corn futures managed to take back all of last week’s losses as December was in rally mode for much of the week, up 16 ¼ cents (4.04%). The weekly Crop Progress report tallied 92% of the US corn crop dented by September 22, with 61% listed as mature. Harvest across the country was listed at 14% complete, ahead of the 11% average. Condition ratings were steady at 65% gd/ex, with the Brugler500 index down 1 point at 364. EIA data showed ethanol production dropping another 55,000 barrels per day to 994,000 barrels per day in the week that ended on September 20. Stocks saw a draw of 261,000 barrels to 23.524 million barrels. Export Sales data tallied new crop sales at just 535,056 MT in the week ending on September 19. That took export commitments to 14.744 MMT, which is 25% of the US export forecast and lagging the average sales pace of 31% this early in the marketing year. Commitment of Traders data showed managed money in corn futures and options trimming back 4,115 contracts from their net short position in the week that ended on September 24, to 130,669 contracts by that Tuesday.
Wheat got started off with strength this week that helped to push the weekly change to the green. December Kansas City was the leader to the upside, back up 12 ¾ cents (2.26%). Chicago December was 11 ½ cents higher (2.02%) for the week. Minneapolis spring wheat was in the back shouting ‘wait up for me’ as December managed just a ¼ cent gain on the week. Crop Progress data tallied the spring wheat harvest at 95% complete by September 22. The winter wheat crop was reported at 25% plated by last Sunday. Export Sales data indicated that US exporters are still struggling to get the sales for 24/25 dropping to 158,938 MT in the week that ended on 9/19. That took export sale commitments to 11.259 MMT, which is a 4-year high, but just 50% of the USDA forecast for export and lagging the 54% average. Friday’s Commitment of Traders report showed CBT wheat spec traders adding back 1,436 contracts to their net short to 26,469 contracts as of September 24. In KC wheat, they took the net short position back up 2,460 contracts to 19,946 contracts as of Tuesday.
Soybeans rode a rollercoaster, as the week was filled with ups and downs, but November managed more ups, 53 ¾ cents higher (5.31%). October soybean meal was up a large $26.30/ton (8.29%), with a bulk coming on a Friday rally. Bean oil was up just 2 points (0.05%) on the week. The weekly Crop Progress report showed 57% of the US soybean crop dropping leaves as of last Sunday, with harvest 13% completed. NASS left condition ratings at 65% gd/ex, as the Brugler500 index was unchanged at 362. The weekly Export Sales report showed new crop business slipping this week to 1.574 MMT, which was still impressive. That took the accumulated shipped and unshipped sales to 17.567 MMT. That is 35% of USDA’s expected export total in their WASDE balance sheet, now 9 percentage points back of the average pace. The weekly Commitment of Traders report showed soybean spec funds slashing another 47,437 contracts from to their net short as of Tuesday, September 24 at 74,978 contracts.
Live cattle came out of the week with a $1.275 gain, a 0.7% move higher. Cash trade saw some Southern action at $184-185 this week, with Northern trade at $185-187. Both regions were $1-3 stronger on the week. Feeders saw a rally in the October contract up $3.175, 1.3% higher. The CME Feeder Cattle Index was back up $2.27 week/week to $245.53. Wholesale boxed beef prices were down again this week, with Choice boxes dropping $3.50 at $2.96.69 and dropping below $300 for the first time since May, while Select was $6.51 lower to $282.08. Weekly beef production was back up 0.7% from the previous week and 3.8% above the same week last year at 524.1 million lbs. That left the YTD beef production down 0.8% from the same time a year ago, with cattle slaughter down 3.9%. Cold Storage data showed August 31 beef stocks at 395.186 million lbs, a 10-year low for the month and a 1.83% drop from the end of July. Export Sales data showed beef sales at just 10,061 MT in the week that ended on 9/19, a 7-week low. Export shipments were 12,493 MT in that week, back down from the previous week. Commitment of Traders data showed cattle specs adding 13,893 contracts to their net long to 52,224 contracts. Specs in feeder cattle flipped to net long 2,027 contracts, by a move of 2,106 contracts as of September 24.
Hogs saw a pullback this week, as October was down 17 cents, or 0.21%, as December was down 1.15% (85 cents) The CME Lean Hog Index was down another 31 cents this week at $84.07 as of September 25. USDA’s Pork Carcass Cutout was up $1.60 this week to $95.75. The belly primal was the leader to the upside, up $7.25, as the rib was up $4.36. The loin and ham were all lower. Weekly pork production was up 2.8% from last week but 1% below the same week last year at 543.3 million lbs. YTD hog slaughter has run 1.2% above last year, with pork production 1.6% higher. The monthly Cold Storage report showed August 31 pork stocks at 453.64 million lbs, a 13-year low for the month and slightly above the end of July. The weekly Export Sales tallied pork bookings at 28,026 MT in the week that ended on 9/19, a 3-week low. Shipments were back down at 27,857 MT in that week. Hogs & Pigs data showed all hog inventory on September 1 at 76.48 million head, up 0.46% from last year. Market hogs were up 0.69% to 70.437 million head, with breeding hogs down 2.18% at 6.044 million head. The June-August pig crop was down 0.75% from last year at 35.03 million head. Specs in lean hog futures and options added another 11,890 contracts to their net long position as of 9/24 to a net long 51,605 contracts.
Cotton futures got a higher start to the week, with the last half showing a pullback, as December was down 80 points or 1.09%. This week’s Crop Progress report showed 63% of the US cotton crop with bolls open by 9/22 and 14% of the crop harvested. Condition ratings were 2% lower to 37% gd/ex, with the Brugler500 index falling 13 points to 295. Some of those open bolls may have been in the way of Hurricane Helene this week. Export Sales data showed cotton bookings of 87,784 RB in the week ending on 9/19, a MY low. Shipments also totaled a MY low of just 79,504 RB. The FSA raised the Adjusted World Price for cotton by 223 points on Thursday, to 61.06 cents/lb. Weekly data from CFTC showed managed money spec funds in cotton futures and options slashing another 12,969 contracts from their net short as of September 24. By that Tuesday they were net short just 17,549 contracts.
Market Watch
Next week begins with a faster paced Monday than most. The weekly Export Inspections report will be out in the morning, with the Crop Progress report out in afternoon per normal. However, NASS is throwing in the annual Small Grains Summary and quarterly Grain Stocks at 11:00 am CDT. Monday is also first notice day for October soybean meal and soy oil. On Tuesday USDA will release the monthly Cotton Systems, Grain Crushing, and Fats & Oils report. On Wednesday, the EIA will release their Weekly Petroleum Status Report. On Thursday, USDA will release the weekly Export Sales report in the morning. October live cattle options expire on Friday.
Tech Talk: November Soybeans
November soybeans had a strong end to the week, capped by a bullish engulfing line on Friday. The close at $10.65 ¾ was above the 38.2% Fib retracement resistance at $10.60. That is not the definition of a breakout, but close. The overbought RSI and Stochastics would argue that we get a pullback on Monday, but with a USDA report, anything is possible. If we get on, the initial support would be the 18-day moving average support at $10.20 ¾, with the 40-day at $10.03 ¾. However, the other aspect to that is we are in a trending market, noted by ADX at 51 and a bullish MACD with solid momentum. There is a rising regression channel, with resistance at $10.69 ¾ putting a stop to things on Friday. Lower channel support is at $10.16 ¾. Any breakout to the upside or continuation of the uptrend would put resistance at the 100-day moving average of $10.80, with the 50% retracement at $10.92 ¾.
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.
Restless Before the Storm. Ag Marketing Report 09/30/2024
One idiom we often hear of is ‘the calm before the storm,’ to describe a very chill pattern prior to a big event. However, this week in the markets has been anything but a ‘calm.’ December Corn had an average high-low daily range of 2.16% (9 cents) this week, with November soybeans an average daily range of 2.69% (28 ¼ cents). Considering we in the $4 and $10 area, that is a pretty impressive range. However, it seems as though the markets were getting a little restless, just like cattle tens to do as a cold front comes through. Well, there is the potential for a storm this next Monday in those markets, with the USDA releasing their September 1 stocks data. So the question for many will be, does the restlessness resemble a bull reaction ahead of the storm, or will the bears show up? Stay Tuned!
Corn futures managed to take back all of last week’s losses as December was in rally mode for much of the week, up 16 ¼ cents (4.04%). The weekly Crop Progress report tallied 92% of the US corn crop dented by September 22, with 61% listed as mature. Harvest across the country was listed at 14% complete, ahead of the 11% average. Condition ratings were steady at 65% gd/ex, with the Brugler500 index down 1 point at 364. EIA data showed ethanol production dropping another 55,000 barrels per day to 994,000 barrels per day in the week that ended on September 20. Stocks saw a draw of 261,000 barrels to 23.524 million barrels. Export Sales data tallied new crop sales at just 535,056 MT in the week ending on September 19. That took export commitments to 14.744 MMT, which is 25% of the US export forecast and lagging the average sales pace of 31% this early in the marketing year. Commitment of Traders data showed managed money in corn futures and options trimming back 4,115 contracts from their net short position in the week that ended on September 24, to 130,669 contracts by that Tuesday.
Wheat got started off with strength this week that helped to push the weekly change to the green. December Kansas City was the leader to the upside, back up 12 ¾ cents (2.26%). Chicago December was 11 ½ cents higher (2.02%) for the week. Minneapolis spring wheat was in the back shouting ‘wait up for me’ as December managed just a ¼ cent gain on the week. Crop Progress data tallied the spring wheat harvest at 95% complete by September 22. The winter wheat crop was reported at 25% plated by last Sunday. Export Sales data indicated that US exporters are still struggling to get the sales for 24/25 dropping to 158,938 MT in the week that ended on 9/19. That took export sale commitments to 11.259 MMT, which is a 4-year high, but just 50% of the USDA forecast for export and lagging the 54% average. Friday’s Commitment of Traders report showed CBT wheat spec traders adding back 1,436 contracts to their net short to 26,469 contracts as of September 24. In KC wheat, they took the net short position back up 2,460 contracts to 19,946 contracts as of Tuesday.
Soybeans rode a rollercoaster, as the week was filled with ups and downs, but November managed more ups, 53 ¾ cents higher (5.31%). October soybean meal was up a large $26.30/ton (8.29%), with a bulk coming on a Friday rally. Bean oil was up just 2 points (0.05%) on the week. The weekly Crop Progress report showed 57% of the US soybean crop dropping leaves as of last Sunday, with harvest 13% completed. NASS left condition ratings at 65% gd/ex, as the Brugler500 index was unchanged at 362. The weekly Export Sales report showed new crop business slipping this week to 1.574 MMT, which was still impressive. That took the accumulated shipped and unshipped sales to 17.567 MMT. That is 35% of USDA’s expected export total in their WASDE balance sheet, now 9 percentage points back of the average pace. The weekly Commitment of Traders report showed soybean spec funds slashing another 47,437 contracts from to their net short as of Tuesday, September 24 at 74,978 contracts.
Live cattle came out of the week with a $1.275 gain, a 0.7% move higher. Cash trade saw some Southern action at $184-185 this week, with Northern trade at $185-187. Both regions were $1-3 stronger on the week. Feeders saw a rally in the October contract up $3.175, 1.3% higher. The CME Feeder Cattle Index was back up $2.27 week/week to $245.53. Wholesale boxed beef prices were down again this week, with Choice boxes dropping $3.50 at $2.96.69 and dropping below $300 for the first time since May, while Select was $6.51 lower to $282.08. Weekly beef production was back up 0.7% from the previous week and 3.8% above the same week last year at 524.1 million lbs. That left the YTD beef production down 0.8% from the same time a year ago, with cattle slaughter down 3.9%. Cold Storage data showed August 31 beef stocks at 395.186 million lbs, a 10-year low for the month and a 1.83% drop from the end of July. Export Sales data showed beef sales at just 10,061 MT in the week that ended on 9/19, a 7-week low. Export shipments were 12,493 MT in that week, back down from the previous week. Commitment of Traders data showed cattle specs adding 13,893 contracts to their net long to 52,224 contracts. Specs in feeder cattle flipped to net long 2,027 contracts, by a move of 2,106 contracts as of September 24.
Hogs saw a pullback this week, as October was down 17 cents, or 0.21%, as December was down 1.15% (85 cents) The CME Lean Hog Index was down another 31 cents this week at $84.07 as of September 25. USDA’s Pork Carcass Cutout was up $1.60 this week to $95.75. The belly primal was the leader to the upside, up $7.25, as the rib was up $4.36. The loin and ham were all lower. Weekly pork production was up 2.8% from last week but 1% below the same week last year at 543.3 million lbs. YTD hog slaughter has run 1.2% above last year, with pork production 1.6% higher. The monthly Cold Storage report showed August 31 pork stocks at 453.64 million lbs, a 13-year low for the month and slightly above the end of July. The weekly Export Sales tallied pork bookings at 28,026 MT in the week that ended on 9/19, a 3-week low. Shipments were back down at 27,857 MT in that week. Hogs & Pigs data showed all hog inventory on September 1 at 76.48 million head, up 0.46% from last year. Market hogs were up 0.69% to 70.437 million head, with breeding hogs down 2.18% at 6.044 million head. The June-August pig crop was down 0.75% from last year at 35.03 million head. Specs in lean hog futures and options added another 11,890 contracts to their net long position as of 9/24 to a net long 51,605 contracts.
Cotton futures got a higher start to the week, with the last half showing a pullback, as December was down 80 points or 1.09%. This week’s Crop Progress report showed 63% of the US cotton crop with bolls open by 9/22 and 14% of the crop harvested. Condition ratings were 2% lower to 37% gd/ex, with the Brugler500 index falling 13 points to 295. Some of those open bolls may have been in the way of Hurricane Helene this week. Export Sales data showed cotton bookings of 87,784 RB in the week ending on 9/19, a MY low. Shipments also totaled a MY low of just 79,504 RB. The FSA raised the Adjusted World Price for cotton by 223 points on Thursday, to 61.06 cents/lb. Weekly data from CFTC showed managed money spec funds in cotton futures and options slashing another 12,969 contracts from their net short as of September 24. By that Tuesday they were net short just 17,549 contracts.
Market Watch
Next week begins with a faster paced Monday than most. The weekly Export Inspections report will be out in the morning, with the Crop Progress report out in afternoon per normal. However, NASS is throwing in the annual Small Grains Summary and quarterly Grain Stocks at 11:00 am CDT. Monday is also first notice day for October soybean meal and soy oil. On Tuesday USDA will release the monthly Cotton Systems, Grain Crushing, and Fats & Oils report. On Wednesday, the EIA will release their Weekly Petroleum Status Report. On Thursday, USDA will release the weekly Export Sales report in the morning. October live cattle options expire on Friday.
Tech Talk: November Soybeans
November soybeans had a strong end to the week, capped by a bullish engulfing line on Friday. The close at $10.65 ¾ was above the 38.2% Fib retracement resistance at $10.60. That is not the definition of a breakout, but close. The overbought RSI and Stochastics would argue that we get a pullback on Monday, but with a USDA report, anything is possible. If we get on, the initial support would be the 18-day moving average support at $10.20 ¾, with the 40-day at $10.03 ¾. However, the other aspect to that is we are in a trending market, noted by ADX at 51 and a bullish MACD with solid momentum. There is a rising regression channel, with resistance at $10.69 ¾ putting a stop to things on Friday. Lower channel support is at $10.16 ¾. Any breakout to the upside or continuation of the uptrend would put resistance at the 100-day moving average of $10.80, with the 50% retracement at $10.92 ¾.
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.