Remembering back to the last Trump Presidency, there were more times than I can count where you’d look at the market quotes and notice a price movement from where you last looked 30 minutes prior. After a few moments, you’d realize there was some tweet from the President that explained most of it. More times than not, it was trade related, and as time went on, it would be second nature to go check Twitter (now X) and see what was said. The unexpected had been expected at that point, and at times the risk was already worked into the market. So, earlier this week when the President-elect posted on his Truth Social account of potential tariffs when he takes office on Mexico, Canada, and China, the market had some, albeit delayed, response to it. However, the market movement was less volatile than back in the 2018/2019 trade war. Of course, much of this is a negotiation tactic to try and get into a higher leverage spot ahead of taking office, which may be off benefit to minimizing a trade war this time. Though the ultimate test will be how much leverage we have this go ‘round. Still, with the next administration set to take over in the next 2 months, the market is in a pretty good mindset to expect the unexpected.
Corn slipped lower again this week, bouncing from the pre-Thanksgiving weakness on Friday to minimize the damage. March was down 2 ¼ cents (0.52%) on the week. EIA data from Wednesday showed ethanol production improving to a record 1.119 million barrels per day in the week of 11/22, a 9,000 bpd increase on the week. Stocks of ethanol were up another 306,000 barrels to 22.869 million barrels. Weekly Export Sales data showed corn sales for 2024/25 back down from the week prior to 1.06 MMT in the week ending on November 21. That took export commitments to 32.459 MMT, a 33% increase over last year. That is also 55% of the US export forecast and now ahead of the average sales pace of 49%. Actual shipments are 10.338 MMT for the marketing year, which is 35% larger year/year and 18% of USDA’s number vs. the 14% average.
Wheat was a pressure factor for the grains, as the complex was weaker over the course of the short week. Chicago March was back down 16 ¾ cents (-2.97 %) on the week. March Kansas City posted a loss of 24 3/4 cents (-4.38%) this week to lead the charge to the downside as winter wheat conditions continued to improve. MPLS March was down 9 3/4 cents since last Friday (1.62%). The final Crop Progress report of the year showed the winter wheat crop at 97% planted by last Sunday, with emergence at 89% of the crop. Condition ratings were pegged at 55% in good/excellent condition, up 6% on the week. That raised the Brugler500 score by another 10 points to 348, with a 35-point increase since the initial rating at the end of October. This week’s Export Sales report showed US wheat export business dropping back off to the lowest in 9 weeks to 366,084 MT for the week of 11/21. That took export sale commitments to 15.311 MMT, which is 68% of the USDA forecast for exports, still lagging the 71% average selling pace. Shipments are 10.519 MMT, 32% above a year ago and 46% of USDA’s forecast compared to the 48% average shipping pace.
Soybeans got some slight support from the solid part of the products this week, as January was back up just 5 cents (0.61%). Soybean meal was up $2 (0.68%). Bean oil was again a pressure factor, albeit slight, slipping another 7 points on the week (0.17%). Daily export sale announcements from FAS this week added up to 1.124 MMT for soybeans between China and unknown destinations. The delayed Friday morning Export Sales report showed 2024/25 business improvement to a MY high of 2.49 MMT. That took the accumulated shipped and unshipped sales to 33.873 MMT. That is 68% of USDA’s expected export total for the marketing year, now 2 percentage points back of the average pace and catching up. Accumulated shipments this year have been 19.274 MMT, 13% above the same point last year and 39% of the USDA number vs. the 36% average pace.
Live cattle were up another $1.20 this week in the December contract (0.64%). Cash trade was mostly $189-190 in the South this week, a $2-3 jump from the week prior, with the North up $3-5 at $190-192. Feeders were again the leaders, up $5.175 (2.03%) in the January contract on the week. The CME Feeder Cattle Index was up another 66 cents week/week to $255.20. A case of New World Screwworm was reported in southern Mexico, with the US placing temporary import restrictions on animals coming in from the country. Wholesale boxed beef prices were stronger this week, as the Chc/Sel spread widened out to 36.22/cwt. Choice was up $3.11 (1%) to $310.52, while Select was $2.33 higher (0.8%) to $274.30. Cold Storage data was released on Monday tallying beef stocks at 431.88 million lbs on 10/31, a 10-year low for the month and a 4.71% increase from last month. USDA showed 4,846 MT of 2024 beef sold in the week that ended on November 21, a calendar year low, with another 5,042 MT sold for 2025. Shipments totaled 14,536 MT, a 3-week high.
Hogs were back higher again week, as December was up 40 cents (0.49%). The CME Lean Hog Index was down another $1.93 this week at $85.51 as of November 26. USDA’s Pork Carcass Cutout was down another $1.46 this week to $90.31. Just the butt and ham primals were reported higher, with the belly leading the change lower down $10.86. Pork stocks were reported at 426.03 million lbs for the end of October by NASS on Monday, a 20-year low. That was down 7.06% from last month and 2.71% lower than the October 2023 total. Pork export sales were tallied at 17,222 MT for 2024 in the week of 11/21, with 17,501 MT for 2025. Shipments were tallied at 28,119 MT, the lowest is 7 weeks.
Cotton futures extended last week’s recovery, as futures were up another 116 points (1.64%) in the March contract, a 302 point increase in the last two weeks. The final Crop Progress report for this year showed 84% of the US cotton crop harvested, 4% ahead of the average pace. This week’s Export Sales report showed a MY high 324,072 RB of cotton sold in the week of 11/21. Shipments slipped back to 130,318 RB in that week. Total commitments for upland cotton are 6.668 million RB, which is down 14% from a year ago. That is also 63% of the USDA forecast, compared to the normal sales pace of would be 70% of USDA’s export projection by now. Shipments are now 1.988 million RB, which is 19% of that forecast vs. the 23% average pace. The FSA Adjusted World Price for cotton was back up 162 points this week, to 57.53 cents/lb.
Market Watch
We start next week with the Monday morning Export Inspections report. The monthly domestic use report will be released from NASS via the Grain Crushing, Fats & Oils, and Cotton Systems reports. Skip ahead to Wednesday and the weekly EIA Petroleum Status Report will be released. The weekly Export Sales release will be back to a Thursday morning release, with Census also being released that morning. Friday the last trading day for December cotton futures, as well as December live cattle options.
Tech Talk: March Corn
March corn had a bit of a hickey this week, with the Tuesday reaction to Trump’s Monday evening post on Truth Social regarding the Mexico tariffs. Now, on Wednesday he spoke with Mexico’s President Sheinbaum, with her later saying there is not going to be a tariff war. That helped the Friday action; however, the technical damage was already done. The pink boxes/circles/lines all represent a head and shoulders top pattern, which was broken on Tuesday and points to $4.11. In order to invalidate that, we need to get back above the right shoulder at $4.42 ¼. That means breaking through the 2/3 speedline resistance (that stopped the two Nov spikes) at $4.40. Typically, in a good H&S pattern, the market will go to retest the broken neckline just to make sure, which is where we got to on Friday. There was also a break of a 2/3 speedline support off the October low, hinting at a test of $4.14. MACD has flipped back bearish, with stochastics in neutral and a bearish bias. The previously oversold 4-day RSI argued for, and got, a bounce. Now, March did hold up at the 100-day moving average support at $4.27 and the 61.8% Fib retracement of $4.26 ¾. If you’re a bull, that’s your line in the sand. We did see March close back above the 40-day moving average as well on Friday, though that has become porous lately with several trades back and forth above and below it.
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.
Unexpected Expectations. Ag Marketing Report 12/02/2024
Remembering back to the last Trump Presidency, there were more times than I can count where you’d look at the market quotes and notice a price movement from where you last looked 30 minutes prior. After a few moments, you’d realize there was some tweet from the President that explained most of it. More times than not, it was trade related, and as time went on, it would be second nature to go check Twitter (now X) and see what was said. The unexpected had been expected at that point, and at times the risk was already worked into the market. So, earlier this week when the President-elect posted on his Truth Social account of potential tariffs when he takes office on Mexico, Canada, and China, the market had some, albeit delayed, response to it. However, the market movement was less volatile than back in the 2018/2019 trade war. Of course, much of this is a negotiation tactic to try and get into a higher leverage spot ahead of taking office, which may be off benefit to minimizing a trade war this time. Though the ultimate test will be how much leverage we have this go ‘round. Still, with the next administration set to take over in the next 2 months, the market is in a pretty good mindset to expect the unexpected.
Corn slipped lower again this week, bouncing from the pre-Thanksgiving weakness on Friday to minimize the damage. March was down 2 ¼ cents (0.52%) on the week. EIA data from Wednesday showed ethanol production improving to a record 1.119 million barrels per day in the week of 11/22, a 9,000 bpd increase on the week. Stocks of ethanol were up another 306,000 barrels to 22.869 million barrels. Weekly Export Sales data showed corn sales for 2024/25 back down from the week prior to 1.06 MMT in the week ending on November 21. That took export commitments to 32.459 MMT, a 33% increase over last year. That is also 55% of the US export forecast and now ahead of the average sales pace of 49%. Actual shipments are 10.338 MMT for the marketing year, which is 35% larger year/year and 18% of USDA’s number vs. the 14% average.
Wheat was a pressure factor for the grains, as the complex was weaker over the course of the short week. Chicago March was back down 16 ¾ cents (-2.97 %) on the week. March Kansas City posted a loss of 24 3/4 cents (-4.38%) this week to lead the charge to the downside as winter wheat conditions continued to improve. MPLS March was down 9 3/4 cents since last Friday (1.62%). The final Crop Progress report of the year showed the winter wheat crop at 97% planted by last Sunday, with emergence at 89% of the crop. Condition ratings were pegged at 55% in good/excellent condition, up 6% on the week. That raised the Brugler500 score by another 10 points to 348, with a 35-point increase since the initial rating at the end of October. This week’s Export Sales report showed US wheat export business dropping back off to the lowest in 9 weeks to 366,084 MT for the week of 11/21. That took export sale commitments to 15.311 MMT, which is 68% of the USDA forecast for exports, still lagging the 71% average selling pace. Shipments are 10.519 MMT, 32% above a year ago and 46% of USDA’s forecast compared to the 48% average shipping pace.
Soybeans got some slight support from the solid part of the products this week, as January was back up just 5 cents (0.61%). Soybean meal was up $2 (0.68%). Bean oil was again a pressure factor, albeit slight, slipping another 7 points on the week (0.17%). Daily export sale announcements from FAS this week added up to 1.124 MMT for soybeans between China and unknown destinations. The delayed Friday morning Export Sales report showed 2024/25 business improvement to a MY high of 2.49 MMT. That took the accumulated shipped and unshipped sales to 33.873 MMT. That is 68% of USDA’s expected export total for the marketing year, now 2 percentage points back of the average pace and catching up. Accumulated shipments this year have been 19.274 MMT, 13% above the same point last year and 39% of the USDA number vs. the 36% average pace.
Live cattle were up another $1.20 this week in the December contract (0.64%). Cash trade was mostly $189-190 in the South this week, a $2-3 jump from the week prior, with the North up $3-5 at $190-192. Feeders were again the leaders, up $5.175 (2.03%) in the January contract on the week. The CME Feeder Cattle Index was up another 66 cents week/week to $255.20. A case of New World Screwworm was reported in southern Mexico, with the US placing temporary import restrictions on animals coming in from the country. Wholesale boxed beef prices were stronger this week, as the Chc/Sel spread widened out to 36.22/cwt. Choice was up $3.11 (1%) to $310.52, while Select was $2.33 higher (0.8%) to $274.30. Cold Storage data was released on Monday tallying beef stocks at 431.88 million lbs on 10/31, a 10-year low for the month and a 4.71% increase from last month. USDA showed 4,846 MT of 2024 beef sold in the week that ended on November 21, a calendar year low, with another 5,042 MT sold for 2025. Shipments totaled 14,536 MT, a 3-week high.
Hogs were back higher again week, as December was up 40 cents (0.49%). The CME Lean Hog Index was down another $1.93 this week at $85.51 as of November 26. USDA’s Pork Carcass Cutout was down another $1.46 this week to $90.31. Just the butt and ham primals were reported higher, with the belly leading the change lower down $10.86. Pork stocks were reported at 426.03 million lbs for the end of October by NASS on Monday, a 20-year low. That was down 7.06% from last month and 2.71% lower than the October 2023 total. Pork export sales were tallied at 17,222 MT for 2024 in the week of 11/21, with 17,501 MT for 2025. Shipments were tallied at 28,119 MT, the lowest is 7 weeks.
Cotton futures extended last week’s recovery, as futures were up another 116 points (1.64%) in the March contract, a 302 point increase in the last two weeks. The final Crop Progress report for this year showed 84% of the US cotton crop harvested, 4% ahead of the average pace. This week’s Export Sales report showed a MY high 324,072 RB of cotton sold in the week of 11/21. Shipments slipped back to 130,318 RB in that week. Total commitments for upland cotton are 6.668 million RB, which is down 14% from a year ago. That is also 63% of the USDA forecast, compared to the normal sales pace of would be 70% of USDA’s export projection by now. Shipments are now 1.988 million RB, which is 19% of that forecast vs. the 23% average pace. The FSA Adjusted World Price for cotton was back up 162 points this week, to 57.53 cents/lb.
Market Watch
We start next week with the Monday morning Export Inspections report. The monthly domestic use report will be released from NASS via the Grain Crushing, Fats & Oils, and Cotton Systems reports. Skip ahead to Wednesday and the weekly EIA Petroleum Status Report will be released. The weekly Export Sales release will be back to a Thursday morning release, with Census also being released that morning. Friday the last trading day for December cotton futures, as well as December live cattle options.
Tech Talk: March Corn
March corn had a bit of a hickey this week, with the Tuesday reaction to Trump’s Monday evening post on Truth Social regarding the Mexico tariffs. Now, on Wednesday he spoke with Mexico’s President Sheinbaum, with her later saying there is not going to be a tariff war. That helped the Friday action; however, the technical damage was already done. The pink boxes/circles/lines all represent a head and shoulders top pattern, which was broken on Tuesday and points to $4.11. In order to invalidate that, we need to get back above the right shoulder at $4.42 ¼. That means breaking through the 2/3 speedline resistance (that stopped the two Nov spikes) at $4.40. Typically, in a good H&S pattern, the market will go to retest the broken neckline just to make sure, which is where we got to on Friday. There was also a break of a 2/3 speedline support off the October low, hinting at a test of $4.14. MACD has flipped back bearish, with stochastics in neutral and a bearish bias. The previously oversold 4-day RSI argued for, and got, a bounce. Now, March did hold up at the 100-day moving average support at $4.27 and the 61.8% Fib retracement of $4.26 ¾. If you’re a bull, that’s your line in the sand. We did see March close back above the 40-day moving average as well on Friday, though that has become porous lately with several trades back and forth above and below it.
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.