This week’s election was likely surprising to some and not as much to others. One looking at the polls would have had no indication as to how things could have gone, as it was projected as a toss up. However, President-elect Trump won by a landslide, not only taking the electoral college, but likely even the popular vote with the final tally is counted, with the Republicans also taking the Senate and likely the House. Just like the polls, analysts coming into the Friday USDA reports were looking for slight cuts to yield. NASS decided to give the bulls a surprise and take yield down more than most thought, especially on the bean side.
With the help of continued export business and a friendly USDA report, December corn managed to pull out a 16 ½ cent gain on the week. The USDA reported several daily private export sale announcements totaling 714,480 MT to Mexican and unknown buyers this week, all for the current MY. Crop Production data from Friday showed a 0.7 bpa drop to yield at 183.1 bpa, as production was down 60 mbu to 15.143 bbu. That was the sole change to USDA’s balance sheet, as demand was left unchanged, and stocks were down 61 bbu to 1.938 bbu. This week’s Crop Progress report showed 91% of the US corn crop harvested by November 3, still running well ahead of the 75% average. EIA data showed ethanol production up another 23,000 barrels per day to 1.105 million bpd in the week that ended on November 1. Stocks of ethanol were back up 249,000 barrels to 22.02 million barrels. Export Sales data indicated another strong 2024/25 crop sales total of 2.766 MMT in the week ending on October 31. That took export commitments to 28.586 MMT, a 48% increase over last year. That is also 48% of the US export forecast and now ahead of the average sales pace of 42%. Commitment of Traders data showed managed money flipping to a net long of 22,043 contracts in the week that ended on 11/5, a move of 39,746 contracts to the long side.
Wheat managed to come out of this week with just marginally mixed trade, as the trend has mostly been sideways. Chicago December was just 4 ½ cents higher (0.79%) for the week. December Kansas City saw a loss of 2 ½ cents (-0.44%) this week. MPLS Dec was down 2 cents since last Friday (-0.33%). USDA’s WASDE update this week showed few changes to the US S&D table, with a 5 mbu increase to imports, and a 2 mbu increase to food. That took the ending stocks total up 3 mbu to 815 mbu. Crop Progress data tallied the winter wheat crop at 87% planted by last Sunday, with emergence at 66% of the crop, behind the 71% average pace. Condition ratings were tallied at 41% in good/excellent condition, as the Brugler500 score was up 3 points at 316. Export Sales data showed US export business dropping off in the week that ended on 10/31 to 374,735 MT. That took export sale commitments to 13.993 MMT, which is 62% of the USDA forecast for exports, still lagging the 66% average selling pace. CFTC’s weekly report showed CBT wheat spec traders trimming their net short position by 391 contracts to a net short of 30,781 contracts as of 11/5. In KC wheat, they added back 4,920 contracts to their net short position at 14,080 contracts as of Tuesday.
Soybeans saw some strength this week, mainly post-election in a buy the fact type of reaction, with January up 36 ½ cents on the week. Soybean meal saw a gain of just 90 cents. Bean oil was a supportive factor, rallying another 247 points on the week (5.33%), as potential tariffs on Chinese goods (including used cooking oil) would be supportive. USDA reported daily announcements of just over a combined 371,000 MT of soybeans to China and unknown destinations this week. The Friday Crop Production report showed yield slashed by 1.4 bpa to 51.7 bpa, taking 121 mbu off the production total to 4.461 bbu. That was partially offset by a 25 mbu decrease to export sand 15 mbu cut to crush as stocks were taken down 80 mbu to 470 mbu. Monday’s Crop Progress report showed 94% of the US soybean harvest was complete by 11/3, well ahead of the 85% average pace. Export Sales data showed 2024/25 business backing off from last week’s MY high to 2.04 MMT. That took the accumulated shipped and unshipped sales to 28.303 MMT. That is 57% of USDA’s expected export total in their WASDE balance sheet, now 4 percentage points back of the average pace. CFTC Commitment of Traders data showed soybean spec traders trimming back 2,114 contracts from their net short position as of Tuesday, to 70,112 contracts.
Live cattle continued their pull back this week, with December back down $2.225 (-1.20%). Cash trade was mostly $186-188 this week, a $2-3 drop from the week prior. Feeders saw some later week losses to take the drop to $1.45 this week (-0.59%) this week in the November contract. The CME Feeder Cattle Index was back down $1.12 week/week to $249.86. Wholesale boxed beef prices backed off again this week, as Choice was down $8.41 (-2.7%) to $306.93, while Select was $5.84 lower to $279.19. Weekly beef production was up 0.8% from the previous week and 3.3% above the same week last year at 536.4 million lbs. That left the YTD beef production down 0.5% from the same time a year ago, with cattle slaughter down 3.7%. Export sales of beef totaled a calendar year low at 7,966 MT in the week of 10/31. Weekly shipments totaled 14,368 MT in that week, a reduction from the previous week. Beef exports in September came in at 239.58 million lbs according to converted Census data, which was up 3.5% from last year and 0.6% above the month prior. Commitment of Traders data showed managed money in live cattle futures and options cutting 731 contracts to their net long at 97,838 contracts as of 11/5. Specs in feeder cattle added 2,414 contracts to their net long at 11,374 contracts as of Tuesday.
Hogs fell back this week after spending the last several rallying, as December was down $3.65 (4.34%). The CME Lean Hog Index was up another $2.68 this week at $90.61 as of November 6. USDA’s Pork Carcass Cutout was up $1.59 this week to $102.38. The belly, ham, and picnic primals again all reported lower, with the rib the main driver to the upside, up $9.25. Weekly pork production was down 1.7% from the previous week but up 1.1% above the same week last year at 556.4 million lbs. That left the YTD pork production up 1% from the same time a year ago, with hog slaughter up 1.5%. Weekly Export Sales data indicated a net reduction go 14,675 MT of pork bookings in the week of October 31. Export shipments were a 26-week high at 34,977 MT in that week. Converted Census data to a carcass basis shows September pork exports at 549.2 million lbs. That is a record for the month, up 7.3% from last year, but 2% below the August total. Managed money in lean hog futures and options added another 12,683 contracts to their new record net long position as of November 5 to a net long 115,587 contracts.
Cotton futures were back up 81 points this week in the December contract, a 1.15% move. The weekly Crop Progress report showed 63% of the US cotton crop harvested, 9% ahead of the average pace. Cotton Ginnings data showed 2.402 million RB ginned from October 15 to November 1, taking the total for the year to 4.696 million RB of cotton, a 5-year high for the date. Export Sales data showed 229,039 RB of upland cotton bookings in the week of October 31, which was a marketing year high. Crop Production data showed a slight reduction in US cotton production at 14.19 million bales. The export projection was also down 200,000 bales to 11.3 million bales, which took the ending stocks estimate 200,000 bales higher to 4.3 million. Export shipments were 145,832 RB in that week, the third largest total so far this MY. Total commitments for upland cotton are 5.892 million RB, which is 55% of the USDA forecast. Normally sales would be 66% of USDA’s export projection by now. The FSA cut back the Adjusted World Price for cotton by 58 points on Thursday, to 57.96 cents/lb. Weekly data from CFTC showed managed money spec funds in cotton futures and options adding back just 268 contracts to their net short as of November 5. By that Tuesday they were net short 10,917 contracts.
Market Watch
Next week begins with a government holiday, as we honor those who have served, on Veterans Day. That will push back the weekly Export Inspections report to Tuesday morning, with the Crop Progress report out in the afternoon. The market will be open. CPI data will be released on Wednesday, with PPI data out on Thursday. The weekly EIA Petroleum Status Report will also be pushed back to Thursday morning with November soybean futures expiring as well. USDA will release the weekly Export Sales report on Friday morning, with the monthly NOPA crush report out later that morning.
Tech Talk: January Soybeans
January soybean have posted what looks like a nobody’s home double bottom at the previous August low of $9.73 ½, with taking out the intervening high at $10.87 ½ confirming it. We are halfway there, as futures are testing the 50% Fib retracement resistance off that high at $10.32 ¼. There is a 61.8% at $10.45 ½. The 100-day moving average was enough to provide sellers on Friday’s spike high following the bullish USDA reports. There is also a 2/3 speedline at $10.395. The recent consolidation has narrowed the Bollinger bands into a pinch, with the upper being bent currently at 10.23 ¾. The now bullish MACD would lead you to believe this would be a breakout to the upside, which is also indicative from breaking out of a declining regression channel. Breaking past the $10.40-10.45 area likely would indicate a test of that September high. With that in mind we are now in Trade War territory, so any headline news risk would be biased to the downside with lateral support ($9.735) what would be considered likely a triple bottom in that case, which (almost) never holds.
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.
Surprises. Ag Marketing Report 11/11/2024
This week’s election was likely surprising to some and not as much to others. One looking at the polls would have had no indication as to how things could have gone, as it was projected as a toss up. However, President-elect Trump won by a landslide, not only taking the electoral college, but likely even the popular vote with the final tally is counted, with the Republicans also taking the Senate and likely the House. Just like the polls, analysts coming into the Friday USDA reports were looking for slight cuts to yield. NASS decided to give the bulls a surprise and take yield down more than most thought, especially on the bean side.
With the help of continued export business and a friendly USDA report, December corn managed to pull out a 16 ½ cent gain on the week. The USDA reported several daily private export sale announcements totaling 714,480 MT to Mexican and unknown buyers this week, all for the current MY. Crop Production data from Friday showed a 0.7 bpa drop to yield at 183.1 bpa, as production was down 60 mbu to 15.143 bbu. That was the sole change to USDA’s balance sheet, as demand was left unchanged, and stocks were down 61 bbu to 1.938 bbu. This week’s Crop Progress report showed 91% of the US corn crop harvested by November 3, still running well ahead of the 75% average. EIA data showed ethanol production up another 23,000 barrels per day to 1.105 million bpd in the week that ended on November 1. Stocks of ethanol were back up 249,000 barrels to 22.02 million barrels. Export Sales data indicated another strong 2024/25 crop sales total of 2.766 MMT in the week ending on October 31. That took export commitments to 28.586 MMT, a 48% increase over last year. That is also 48% of the US export forecast and now ahead of the average sales pace of 42%. Commitment of Traders data showed managed money flipping to a net long of 22,043 contracts in the week that ended on 11/5, a move of 39,746 contracts to the long side.
Wheat managed to come out of this week with just marginally mixed trade, as the trend has mostly been sideways. Chicago December was just 4 ½ cents higher (0.79%) for the week. December Kansas City saw a loss of 2 ½ cents (-0.44%) this week. MPLS Dec was down 2 cents since last Friday (-0.33%). USDA’s WASDE update this week showed few changes to the US S&D table, with a 5 mbu increase to imports, and a 2 mbu increase to food. That took the ending stocks total up 3 mbu to 815 mbu. Crop Progress data tallied the winter wheat crop at 87% planted by last Sunday, with emergence at 66% of the crop, behind the 71% average pace. Condition ratings were tallied at 41% in good/excellent condition, as the Brugler500 score was up 3 points at 316. Export Sales data showed US export business dropping off in the week that ended on 10/31 to 374,735 MT. That took export sale commitments to 13.993 MMT, which is 62% of the USDA forecast for exports, still lagging the 66% average selling pace. CFTC’s weekly report showed CBT wheat spec traders trimming their net short position by 391 contracts to a net short of 30,781 contracts as of 11/5. In KC wheat, they added back 4,920 contracts to their net short position at 14,080 contracts as of Tuesday.
Soybeans saw some strength this week, mainly post-election in a buy the fact type of reaction, with January up 36 ½ cents on the week. Soybean meal saw a gain of just 90 cents. Bean oil was a supportive factor, rallying another 247 points on the week (5.33%), as potential tariffs on Chinese goods (including used cooking oil) would be supportive. USDA reported daily announcements of just over a combined 371,000 MT of soybeans to China and unknown destinations this week. The Friday Crop Production report showed yield slashed by 1.4 bpa to 51.7 bpa, taking 121 mbu off the production total to 4.461 bbu. That was partially offset by a 25 mbu decrease to export sand 15 mbu cut to crush as stocks were taken down 80 mbu to 470 mbu. Monday’s Crop Progress report showed 94% of the US soybean harvest was complete by 11/3, well ahead of the 85% average pace. Export Sales data showed 2024/25 business backing off from last week’s MY high to 2.04 MMT. That took the accumulated shipped and unshipped sales to 28.303 MMT. That is 57% of USDA’s expected export total in their WASDE balance sheet, now 4 percentage points back of the average pace. CFTC Commitment of Traders data showed soybean spec traders trimming back 2,114 contracts from their net short position as of Tuesday, to 70,112 contracts.
Live cattle continued their pull back this week, with December back down $2.225 (-1.20%). Cash trade was mostly $186-188 this week, a $2-3 drop from the week prior. Feeders saw some later week losses to take the drop to $1.45 this week (-0.59%) this week in the November contract. The CME Feeder Cattle Index was back down $1.12 week/week to $249.86. Wholesale boxed beef prices backed off again this week, as Choice was down $8.41 (-2.7%) to $306.93, while Select was $5.84 lower to $279.19. Weekly beef production was up 0.8% from the previous week and 3.3% above the same week last year at 536.4 million lbs. That left the YTD beef production down 0.5% from the same time a year ago, with cattle slaughter down 3.7%. Export sales of beef totaled a calendar year low at 7,966 MT in the week of 10/31. Weekly shipments totaled 14,368 MT in that week, a reduction from the previous week. Beef exports in September came in at 239.58 million lbs according to converted Census data, which was up 3.5% from last year and 0.6% above the month prior. Commitment of Traders data showed managed money in live cattle futures and options cutting 731 contracts to their net long at 97,838 contracts as of 11/5. Specs in feeder cattle added 2,414 contracts to their net long at 11,374 contracts as of Tuesday.
Hogs fell back this week after spending the last several rallying, as December was down $3.65 (4.34%). The CME Lean Hog Index was up another $2.68 this week at $90.61 as of November 6. USDA’s Pork Carcass Cutout was up $1.59 this week to $102.38. The belly, ham, and picnic primals again all reported lower, with the rib the main driver to the upside, up $9.25. Weekly pork production was down 1.7% from the previous week but up 1.1% above the same week last year at 556.4 million lbs. That left the YTD pork production up 1% from the same time a year ago, with hog slaughter up 1.5%. Weekly Export Sales data indicated a net reduction go 14,675 MT of pork bookings in the week of October 31. Export shipments were a 26-week high at 34,977 MT in that week. Converted Census data to a carcass basis shows September pork exports at 549.2 million lbs. That is a record for the month, up 7.3% from last year, but 2% below the August total. Managed money in lean hog futures and options added another 12,683 contracts to their new record net long position as of November 5 to a net long 115,587 contracts.
Cotton futures were back up 81 points this week in the December contract, a 1.15% move. The weekly Crop Progress report showed 63% of the US cotton crop harvested, 9% ahead of the average pace. Cotton Ginnings data showed 2.402 million RB ginned from October 15 to November 1, taking the total for the year to 4.696 million RB of cotton, a 5-year high for the date. Export Sales data showed 229,039 RB of upland cotton bookings in the week of October 31, which was a marketing year high. Crop Production data showed a slight reduction in US cotton production at 14.19 million bales. The export projection was also down 200,000 bales to 11.3 million bales, which took the ending stocks estimate 200,000 bales higher to 4.3 million. Export shipments were 145,832 RB in that week, the third largest total so far this MY. Total commitments for upland cotton are 5.892 million RB, which is 55% of the USDA forecast. Normally sales would be 66% of USDA’s export projection by now. The FSA cut back the Adjusted World Price for cotton by 58 points on Thursday, to 57.96 cents/lb. Weekly data from CFTC showed managed money spec funds in cotton futures and options adding back just 268 contracts to their net short as of November 5. By that Tuesday they were net short 10,917 contracts.
Market Watch
Next week begins with a government holiday, as we honor those who have served, on Veterans Day. That will push back the weekly Export Inspections report to Tuesday morning, with the Crop Progress report out in the afternoon. The market will be open. CPI data will be released on Wednesday, with PPI data out on Thursday. The weekly EIA Petroleum Status Report will also be pushed back to Thursday morning with November soybean futures expiring as well. USDA will release the weekly Export Sales report on Friday morning, with the monthly NOPA crush report out later that morning.
Tech Talk: January Soybeans
January soybean have posted what looks like a nobody’s home double bottom at the previous August low of $9.73 ½, with taking out the intervening high at $10.87 ½ confirming it. We are halfway there, as futures are testing the 50% Fib retracement resistance off that high at $10.32 ¼. There is a 61.8% at $10.45 ½. The 100-day moving average was enough to provide sellers on Friday’s spike high following the bullish USDA reports. There is also a 2/3 speedline at $10.395. The recent consolidation has narrowed the Bollinger bands into a pinch, with the upper being bent currently at 10.23 ¾. The now bullish MACD would lead you to believe this would be a breakout to the upside, which is also indicative from breaking out of a declining regression channel. Breaking past the $10.40-10.45 area likely would indicate a test of that September high. With that in mind we are now in Trade War territory, so any headline news risk would be biased to the downside with lateral support ($9.735) what would be considered likely a triple bottom in that case, which (almost) never holds.
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.