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Spooky Season. Ag Marketing Report 10/28/2024
Halloween is next week already. Next Thursday, towns across the country will have children dressed as their favorite character, animal, athlete, and some as witches or ghosts. It’s also the time of year where some will choose to give each other a nice spook! In terms of the market, the grain bulls got a nice spook on Friday with pressure across corn, beans, and wheat. After a week of gains it was a risk of type of day ahead of the weekend, with a South American growing season starting, still elevated Middle East tensions, and an election right around the corner. Cattle bulls got their own (albeit short-lived) spook via a McDonalds e. Coli outbreak, though it turned out to just be onions!
Corn futures saw a strong start to the week, with a weaker Friday trimming the gains to just 10 ½ cents (2.59%) on the week for December. The USDA reported several daily private export sale announcements totaling 1.486 MMT for 2024/25 to Mexican, South Korean, Japanese and unknown buyers. This week’s Crop Progress report showed 65% of the US corn crop harvested by October 20, ahead of the 52% average. EIA data showed ethanol production up another 39,000 barrels per day to 1.081 million bpd in the week that ended on October 18. Stocks of ethanol were back down 52,000 barrels to 22.223 million barrels. Weekly Export Sales data indicated a strong new crop sales total of 3.602 MMT in the week ending on October 17. That took export commitments to 23.478 MMT, a 34% increase over last year. That is also 40% of the US export forecast and now ahead of the average sales pace of 38%. Weekly CFTC data showed managed money cutting back 15,489 contracts from their net short in corn futures and options during the week that ended on October 22. On Tuesday, they held a net short of 71,499 contracts.
Wheat was again the weak spot for the bulls this week as Friday pressure came in the push things lower. Chicago December was 3 3/4 cents lower (-0.65%) for the week. December Kansas City saw a loss of 8 3/4 cents (-1.51%) this week. MPLS Dec was down 11 ¼ cents from last Friday (-1.82%). Crop Progress data tallied the winter wheat crop at 73% planted by last Sunday, 3% behind normal. Emergence was 46% complete, behind the average pace. Export Sales data showed US export business picking up again in the week that ended on 10/17 to 532,885 MT. That was an 8-week high and took export sale commitments to 13.202 MMT. That takes up 59% of the USDA forecast for exports, still lagging the 60% average selling pace. CFTC’s Commitment of Traders report showed CBT wheat spec traders increasing their net short position by 2,902 contracts to a net short of 28,915 contracts as of 10/22. In KC wheat, they trimmed back 841 contracts from their net short position to 5,647 contracts as of Tuesday.
Soybeans clawed back some gains this week in the November contract, up 17 ¾ cents (1.83%) since last Friday and a brief pop above $10. Soybean meal pulled back this week, with December back down $9.80/ton (-3.11%). Bean oil was a supportive factor for the beans, up 233 points (5.57%) on the week. USDA reported daily announcements of just over a combined 1.08 MMT of soybeans to China and unknown destinations this week. Monday’s Crop Progress report showed 81% of the US soybean harvest was complete by October 20, well ahead of the 67% average pace. Export Sales data showed 2024/25 business improving to a MY high of 2.15 MMT. That took the accumulated shipped and unshipped sales to 23.993 MMT. That is 48% of USDA’s expected export total in their WASDE balance sheet, now 8 percentage points back of the average pace. Weekly Commitment of Traders data showed soybean money managers adding back 19,233 contracts to their net short position as of Tuesday, to 59,574 contracts.
Live cattle saw some stronger trade this week, with December back up $1.825 (0.97%). Cash trade was mostly $190-191 in the South, with trade in the North at $190-192, both up from $188 last week. Feeders were clawed back 97 cents (0.39%) this week in the November contract. The CME Feeder Cattle Index was back down $1.71 week/week to $249.09. Wholesale boxed beef prices were stronger again this week, despite some midweek weakness, as Choice was up $1.59 (0.5%) to $322.24, while Select was 88 cents higher to $295.08. Weekly beef production was up 2.6% from the previous week and 1.6% above the same week last year at 537.2 million lbs. That left the YTD beef production down 0.7% from the same time a year ago, with cattle slaughter down 3.8%. Friday’s Cattle on Feed report showed September placements down 1.91% from last year at 2.156 million head, with marketings up 2.04% at 1.698 million head. October 1 on feed inventory was down 0.03% from a year ago at 11.6 million head. Cold Storage data tallied beef stocks at the end of September at 413.79 million lbs, the tightest since 2014. Export sales of beef totaled 16,712 MT in the week that ended on October 17, which was 18.94% larger than the previous week. Shipments totaled 16,050 MT in that week, which was a 3-week high. Commitment of Traders data tallied cattle managed money adding 4,662 contracts to their net long at 90,391 contracts as of 10/22. Specs in feeder cattle added to their net long by 675 contracts to 9,515 contracts as of Tuesday.
Hogs extended their strength in the December contract this week, up $1.85 (2.38%) and nearing the $80 level. The CME Lean Hog Index was back up $1.36 this week at $85.20 as of October 23. USDA’s Pork Carcass Cutout was up $2.35 this week to $98.94. The belly, ham, and rib primals were the main drivers, up in a range of $5.29 to $6.53. Weekly pork production was down 0.2% from last week and 0.5% below the same week last year at 552.4 million lbs. YTD hog slaughter has run 1.0% above last year, with pork production 1.5% higher. September 30 pork stocks totaled 460.14 million lbs, which was a 14-year low for the month. Pork export booking during the week that ended on October 17 were 22,223 MT, which was a 7-week low for 2024 bookings. There was an additional 1,035 MT sold for 2025 shipment. Exports were tallied at 32,057 MT, which was back down from the week prior. Managed money spec funds in lean hog futures and options added another 12,139 contracts to their net long position as of October 22 to a net long 87,126 contracts.
Cotton futures slipped back this week, with December down 33 points (-0.46%). The weekly Crop Progress report showed 94% of the US cotton crop with bolls open by 10/20 and 44% of the crop harvested, 6% ahead of the average pace. Condition ratings were 3% higher to 37% gd/ex, with the Brugler500 index back up 1 point to 295. Export Sales data showed an improvement in bookings during the week of October 10 to 169,687 RB, which was the second highest total we’ve seen in this marketing year. Export shipments were just 98,419 RB in that week, a bounce from last week’s MY low. Total commitments for upland cotton are 5.474 million RB, which is 51% of the USDA forecast. Normally sales would be 62% of USDA’s export projection by now. The FSA raised the Adjusted World Price for cotton by just 4 points on Thursday, to 59.28 cents/lb. Weekly data from CFTC showed managed money spec funds in cotton futures and options cutting back 6,470 contracts from their net short as of October 22. By that Tuesday they were net short just 6,194 contracts.
Market Watch
We start next week with the weekly Export Inspections report on Monday morning and the Crop Progress report out in the afternoon. Skip ahead to Wednesday and the EIA will release their Weekly Petroleum Status Report. Quarter 3 GDP data will also be released on Wednesday. USDA will release the weekly Export Sales report on Thursday morning. Thursday is also the expiration of October live cattle futures and feeder cattle futures and options, as well as first notice day for November soybean futures. Friday will see USDA’s monthly domestic use data release via the Grain Crushing, Fats & Oils, and Cotton Systems reports.
Tech Talk: January Soybeans
January soybeans had a promising start at a double bottom, The low at $9.80 ¾ was less than 8 cents from the August low and coincided with a Stochastics buy signal. We saw some early week strength this week, but Thursday showed up with a shooting star doji candlestick. The high was cents away from the Bollinger midline resistance, now at $10.19 ¾. There is a 38.2% Fib retracement off the September high at $10.21 ½, with the 2/3 speedline at $10.35 ¼. MACD is still bearish, though it is losing momentum. Parabolic SAR was triggered bullish on Thursday, which would indicate a momentum shift, but we typically look for confirmation via MACD.
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