This weekend things are finally going to cool off. After a warmer than normal fall for the most part, my local high for Sunday is 58. The low gets to 30, meaning there will be several cars with defrosters in use come Monday morning. Just like the weather, the ags have been cooling off this week, with corn, beans, and cotton all putting in losses, and wheat shifting sideways. USDA failed to put too much gas on any fires on Friday, so the market will have to look elsewhere for a reason to spark a rally. But then again, we’re heading into another growing season in South America, so maybe things will heat up!
Corn futures faded lower this week, as December was down 9 cents (2.12%) since last Friday. The Monthly Crop Production report from USDA showed a 0.2 bpa increase to yield at 183.8 bpa, raising production by 17 mbu to 15.203 bbu. US ending stocks for 2024/25 were cut by 58 mbu to 1.999 bbu, on a lower 23/24 carryover and increase to exports. The weekly Crop Progress report showed 87% of the US corn crop listed as mature by October 6, with harvest 30% complete and ahead of the 27% average. Condition ratings were steady at 64% gd/ex, with the Brugler500 index down 2 points at 361. EIA data showed ethanol production back up 23,000 barrels per day to 1.038 million bpd in the week that ended on October 4. Stocks of ethanol fell 1.306 million barrels to 22.154 million barrels. Export Sales data tallied new crop sales slipping to 1.222 MMT in the week ending on October 3. That took export commitments to 17.65 MMT, which is 29% of the US export forecast and lagging the average sales pace of 35% this early in the marketing year. Commitment of Traders data showed managed money slashing another 43,970 contracts from their net short in corn futures and options during the week that ended on October 8. On that Tuesday, they held a net short of just 23,729 contracts, a 14-month low.
Wheat was a bright spot for the bulls on the week despite some Friday pressure. Chicago December was 9 ¼ cents higher (1.57%) for the week. December Kansas City saw a gain of 6 1/2 cents (1.09%) this week. MPLS Dec posted a gain of 5 ¼ cents (0.82%). USDA tightened the 2024/25 US wheat carryout by 16 mbu to 812 mbu, with a bulk of that coming via a lower production and revised carryover total. An offsetting 10 mbu was added to both imports and feed & residual. Crop Progress data tallied the winter wheat crop at 51% plated by last Sunday, 1% behind normal. Export Sales data indicated US export business picking up for the week of 10/3 to 433,560 MT. That took export sale commitments to 12.155 MMT, which is just 54% of the USDA forecast for export and lagging the 58% average. Friday’s Commitment of Traders report showed CBT wheat spec traders adding back another 6,496 contracts to their net short to 29,449 contracts as of 10/8. In KC wheat, they took the net short position down another 9,386 contracts to 5,884 contracts as of Tuesday.
Soybeans extended the slide this week, as November was down 32 ¼ cents (3.11%), for a 2-week loss of 60 cents. Soybean meal was again the driver of the complex this week, with December losing another $15.40/ton (4.66%). Bean oil was also lower by 64 points (1.46%) on the week. The October Crop Production report showed a slight 0.1 bpa cut to yield at 53.1 bpa, trimming production by 4 mbu. Stocks for 2024/25 were unchanged at 550 mbu, as a 2 mbu increase to carryover and 2 mbu lower residual total offset the production reduction. Monday’s Crop Progress report showed 90% of the US soybean crop dropping leaves as of last Sunday, with harvest 47% completed. NASS trimmed condition ratings by 1% to 63% gd/ex, as the Brugler500 index was down 1 at 361. Export Sales data showed new crop business slipping again this week to 1.26 MMT. That took the accumulated shipped and unshipped sales to 20.138 MMT. That is 40% of USDA’s expected export total in their WASDE balance sheet, now 10 percentage points back of the average pace. CFTC’s Commitment of Traders report showed soybean spec funds cutting back another 13,088 contracts from to their net short as of Tuesday, to 21,798 contracts.
Live cattle saw some strength this week, continuing to be propped up by the cash market, with October up $1.60 (0.86%) on the week. Cash trade was mostly $186-187 in the South, with trade in the North at $187-188, as both regions were steady to up $1 from last week. Feeders were up another just 12 cents (0.5%) this week. The CME Feeder Cattle Index was up another $3.27 week/week to $250.05. Wholesale boxed beef prices were stronger again this week, as Choice was up $8.64 (2.9%) on the week to $311.22, while Select was just $1.11 higher to $288.72. Weekly beef production was back down 4.1% from the previous week and 1.6% below the same week last year at 504.1 million lbs. That left the YTD beef production down 0.7% from the same time a year ago, with cattle slaughter down 3.8%. Beef export sales totaled 13,702 MT in the week that ended on October 3, back down from the previous week.
Export shipments were 16,044 MT, down from the week prior. Commitment of Traders data tallied cattle managed money adding 13,622 contracts to their net long at 77,026 contracts as of 10/8. Specs in feeder cattle added to their net long by 2,003 contracts to 7,704 contracts as of Tuesday.
Hogs reversed the lower trade from last week, with December up $1.50 on the week (1.97%). The CME Lean Hog Index was back down 43 cents this week at $84.47 as of October 9. USDA’s Pork Carcass Cutout was back up 16 cents this week to $94.47. The butt, rib and belly primals were all reported higher by $3.55 to $3.94, with the other three primals lower. Weekly pork production was slightly below last week and 0.4% below the same week last year at 548.7 million lbs. YTD hog slaughter has run 1.1% above last year, with pork production 1.6% higher. USDA export sales totaled 50,627 MT in the week of 10/3, which was a 14-week high. Shipments were 22,770 MT, the lowest since last December. Specs in lean hog futures and options added another 13,547 contracts to their net long position as of October 8 to a net long 70,599 contracts.
Cotton futures pulled back this week with December down 106 points (1.45%). Crop Production data was down 18 lbs/acre to 789, trimming production by 310,000 bales to 14.2 million. That was offset by a 300,000 bale cut to exports, as stocks were up 100,000 bales to 4.1 million. Cotton Ginnings data showed 1.146 million RB of cotton ginned by October 1, up 473,933 RB from September 15 and the largest for this time since 2019. This week’s Crop Progress report showed 82% of the US cotton crop with bolls open by 10/6 and 26% of the crop harvested. Condition ratings were 2% lower to 29% gd/ex, with the Brugler500 index back up 2 points 14 points to 283 on lower poor/very poor ratings. Export Sales data showed cotton bookings slipping back to just 89,608 RB in the week ending on 10/3. Shipments dropped back to 95,113 RB. Commitments of shipped and unshipped sales are at 5.114 million RB, which is 48% of the USDA export projection, behind the 59% average selling pace. The FSA trimmed the Adjusted World Price for cotton by 40 points on Thursday, to 60.41 cents/lb. Weekly data from CFTC showed managed money spec funds in cotton futures and options adding back 224 contracts to their net short as of October 8. By that Tuesday they were net short just 11,923 contracts.
Market Watch
Next week starts a day late for the government, with Columbus Day on Monday. The market, however, is open, with October lean hog futures and options, as well as October soybean meal and oil futures expiring on Monday. The weekly Export Inspections report is out a day late on Tuesday morning, with the Crop Progress report out in the afternoon. NOPA crush data from September will also be released on Tuesday. The EIA will release their Weekly Petroleum Status Report on Thursday morning. USDA will delay the release of the weekly Export Sales report to Friday morning.
Tech Talk: November Soybeans
With November starting to wind down, we will likely have to be switching another contract soon. However, for November soybeans, the market has been creeping back lower so far in October. After rallying to a 38.2% Fib retracement resistance on $10.60 around the end of September, the high (for the time being) was seemingly put in. Since then, we have dropped to through the 50% Fib retracement support and 40 day moving average at $10.12 ¼ on Friday. The 2/3 speedline off the $9.55 low is trying to hold at 10.06, with $10 round number support close by. Stochastics are oversold and could be an excuse for this area to hold, though MACD just turned bearish on a high ADX. If the $10 can’t hold, a retest of the August low could be likely.
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.
Cooling Off. Ag Marketing Report 10/14/2024
This weekend things are finally going to cool off. After a warmer than normal fall for the most part, my local high for Sunday is 58. The low gets to 30, meaning there will be several cars with defrosters in use come Monday morning. Just like the weather, the ags have been cooling off this week, with corn, beans, and cotton all putting in losses, and wheat shifting sideways. USDA failed to put too much gas on any fires on Friday, so the market will have to look elsewhere for a reason to spark a rally. But then again, we’re heading into another growing season in South America, so maybe things will heat up!
Corn futures faded lower this week, as December was down 9 cents (2.12%) since last Friday. The Monthly Crop Production report from USDA showed a 0.2 bpa increase to yield at 183.8 bpa, raising production by 17 mbu to 15.203 bbu. US ending stocks for 2024/25 were cut by 58 mbu to 1.999 bbu, on a lower 23/24 carryover and increase to exports. The weekly Crop Progress report showed 87% of the US corn crop listed as mature by October 6, with harvest 30% complete and ahead of the 27% average. Condition ratings were steady at 64% gd/ex, with the Brugler500 index down 2 points at 361. EIA data showed ethanol production back up 23,000 barrels per day to 1.038 million bpd in the week that ended on October 4. Stocks of ethanol fell 1.306 million barrels to 22.154 million barrels. Export Sales data tallied new crop sales slipping to 1.222 MMT in the week ending on October 3. That took export commitments to 17.65 MMT, which is 29% of the US export forecast and lagging the average sales pace of 35% this early in the marketing year. Commitment of Traders data showed managed money slashing another 43,970 contracts from their net short in corn futures and options during the week that ended on October 8. On that Tuesday, they held a net short of just 23,729 contracts, a 14-month low.
Wheat was a bright spot for the bulls on the week despite some Friday pressure. Chicago December was 9 ¼ cents higher (1.57%) for the week. December Kansas City saw a gain of 6 1/2 cents (1.09%) this week. MPLS Dec posted a gain of 5 ¼ cents (0.82%). USDA tightened the 2024/25 US wheat carryout by 16 mbu to 812 mbu, with a bulk of that coming via a lower production and revised carryover total. An offsetting 10 mbu was added to both imports and feed & residual. Crop Progress data tallied the winter wheat crop at 51% plated by last Sunday, 1% behind normal. Export Sales data indicated US export business picking up for the week of 10/3 to 433,560 MT. That took export sale commitments to 12.155 MMT, which is just 54% of the USDA forecast for export and lagging the 58% average. Friday’s Commitment of Traders report showed CBT wheat spec traders adding back another 6,496 contracts to their net short to 29,449 contracts as of 10/8. In KC wheat, they took the net short position down another 9,386 contracts to 5,884 contracts as of Tuesday.
Soybeans extended the slide this week, as November was down 32 ¼ cents (3.11%), for a 2-week loss of 60 cents. Soybean meal was again the driver of the complex this week, with December losing another $15.40/ton (4.66%). Bean oil was also lower by 64 points (1.46%) on the week. The October Crop Production report showed a slight 0.1 bpa cut to yield at 53.1 bpa, trimming production by 4 mbu. Stocks for 2024/25 were unchanged at 550 mbu, as a 2 mbu increase to carryover and 2 mbu lower residual total offset the production reduction. Monday’s Crop Progress report showed 90% of the US soybean crop dropping leaves as of last Sunday, with harvest 47% completed. NASS trimmed condition ratings by 1% to 63% gd/ex, as the Brugler500 index was down 1 at 361. Export Sales data showed new crop business slipping again this week to 1.26 MMT. That took the accumulated shipped and unshipped sales to 20.138 MMT. That is 40% of USDA’s expected export total in their WASDE balance sheet, now 10 percentage points back of the average pace. CFTC’s Commitment of Traders report showed soybean spec funds cutting back another 13,088 contracts from to their net short as of Tuesday, to 21,798 contracts.
Live cattle saw some strength this week, continuing to be propped up by the cash market, with October up $1.60 (0.86%) on the week. Cash trade was mostly $186-187 in the South, with trade in the North at $187-188, as both regions were steady to up $1 from last week. Feeders were up another just 12 cents (0.5%) this week. The CME Feeder Cattle Index was up another $3.27 week/week to $250.05. Wholesale boxed beef prices were stronger again this week, as Choice was up $8.64 (2.9%) on the week to $311.22, while Select was just $1.11 higher to $288.72. Weekly beef production was back down 4.1% from the previous week and 1.6% below the same week last year at 504.1 million lbs. That left the YTD beef production down 0.7% from the same time a year ago, with cattle slaughter down 3.8%. Beef export sales totaled 13,702 MT in the week that ended on October 3, back down from the previous week.
Export shipments were 16,044 MT, down from the week prior. Commitment of Traders data tallied cattle managed money adding 13,622 contracts to their net long at 77,026 contracts as of 10/8. Specs in feeder cattle added to their net long by 2,003 contracts to 7,704 contracts as of Tuesday.
Hogs reversed the lower trade from last week, with December up $1.50 on the week (1.97%). The CME Lean Hog Index was back down 43 cents this week at $84.47 as of October 9. USDA’s Pork Carcass Cutout was back up 16 cents this week to $94.47. The butt, rib and belly primals were all reported higher by $3.55 to $3.94, with the other three primals lower. Weekly pork production was slightly below last week and 0.4% below the same week last year at 548.7 million lbs. YTD hog slaughter has run 1.1% above last year, with pork production 1.6% higher. USDA export sales totaled 50,627 MT in the week of 10/3, which was a 14-week high. Shipments were 22,770 MT, the lowest since last December. Specs in lean hog futures and options added another 13,547 contracts to their net long position as of October 8 to a net long 70,599 contracts.
Cotton futures pulled back this week with December down 106 points (1.45%). Crop Production data was down 18 lbs/acre to 789, trimming production by 310,000 bales to 14.2 million. That was offset by a 300,000 bale cut to exports, as stocks were up 100,000 bales to 4.1 million. Cotton Ginnings data showed 1.146 million RB of cotton ginned by October 1, up 473,933 RB from September 15 and the largest for this time since 2019. This week’s Crop Progress report showed 82% of the US cotton crop with bolls open by 10/6 and 26% of the crop harvested. Condition ratings were 2% lower to 29% gd/ex, with the Brugler500 index back up 2 points 14 points to 283 on lower poor/very poor ratings. Export Sales data showed cotton bookings slipping back to just 89,608 RB in the week ending on 10/3. Shipments dropped back to 95,113 RB. Commitments of shipped and unshipped sales are at 5.114 million RB, which is 48% of the USDA export projection, behind the 59% average selling pace. The FSA trimmed the Adjusted World Price for cotton by 40 points on Thursday, to 60.41 cents/lb. Weekly data from CFTC showed managed money spec funds in cotton futures and options adding back 224 contracts to their net short as of October 8. By that Tuesday they were net short just 11,923 contracts.
Market Watch
Next week starts a day late for the government, with Columbus Day on Monday. The market, however, is open, with October lean hog futures and options, as well as October soybean meal and oil futures expiring on Monday. The weekly Export Inspections report is out a day late on Tuesday morning, with the Crop Progress report out in the afternoon. NOPA crush data from September will also be released on Tuesday. The EIA will release their Weekly Petroleum Status Report on Thursday morning. USDA will delay the release of the weekly Export Sales report to Friday morning.
Tech Talk: November Soybeans
With November starting to wind down, we will likely have to be switching another contract soon. However, for November soybeans, the market has been creeping back lower so far in October. After rallying to a 38.2% Fib retracement resistance on $10.60 around the end of September, the high (for the time being) was seemingly put in. Since then, we have dropped to through the 50% Fib retracement support and 40 day moving average at $10.12 ¼ on Friday. The 2/3 speedline off the $9.55 low is trying to hold at 10.06, with $10 round number support close by. Stochastics are oversold and could be an excuse for this area to hold, though MACD just turned bearish on a high ADX. If the $10 can’t hold, a retest of the August low could be likely.
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.