Christmas is right around the corner. By this time next week, some people will be gathering with family to celebrate the holiday. Remembering back to my childhood, at the Christmas Eve church service, elders of the church would always pass out bags of goodies to the kids as we were ushered out. Most of the time there was the typical Christmas candy, as well as an apple or orange, mixed with peanuts and an assortment of tree nuts. I’m not sure who looked forward to it most, myself or my father, as he always picked out the peanuts for himself (weird how I find myself doing the same thing now). In general, it was a mixed bag, and you never knew what you were going to get. In a nutshell (pun intended), that was the ag markets this week. Some commodities were higher, some were lower, and others did a whole lot of nothing.
Corn faced some back and forth trade this week, but March managed to sneak out a gain of 2 cents. The market was busy pricing in a bullish USDA report, which was released on Tuesday and showed a few more bull-friendly numbers than expected. USDA raised both ethanol demand and exports by a combined 200 million bushels, which cut the ending stocks number by the same to 1.738 billion bushels. Bulls were busy taking money off the table the rest of the week. EIA data showed ethanol production up just slightly to 1.078 million barrels per day in the week of 12/6. Stocks of ethanol were back down 355,000 barrels to 22.648 million barrels. Export Sales data saw 2024/25 corn sales drop off to the lowest in 11 weeks at 946,863 MT for the week ending on December 5. That took export commitments to 35.14 MMT, which is 56% of the fresh US export forecast and still ahead of the average sales pace of 53%. Commitment of Traders data showed managed money funds in corn futures and options piling on 77,670 contracts to their net long as of 12/10. They held a net long of 165,890 contracts on Tuesday.
Wheat saw some mixed action this week as mid-week pressure capped gains and pressured the soft red wheat market. Chicago March was back down 5 cents on the week. March Kansas City posted a gain of 3 ¼ cents this week, with MPLS March was just 2 cents higher since last Friday. The early week strength came by way of a friendly USDA report, as the World Ag Outlook Board shocked the market with a 25 mbu increase to exports. A 5 mbu uptick to import limited the stocks cut to just 20 mbu, now at 795 million bushels. Thursday’s Export Sales report showed US wheat export business back down to 290,236 MT during the week of 12/5. That took export sale commitments to 15.698 MMT, which is now 69% of the USDA forecast for exports and still lagging the 76% average selling pace. The weekly Commitment of Traders report from CFTC tallied spec traders trimming back 2,607 contracts from their CBT wheat net short at 66,779 contracts by Tuesday. In KC wheat, they cut their net short by 1,994 contracts as of December 10 to 36,436 contracts.
Soybeans faced some product pressure this week, as USDA was relatively quiet on Tuesday. January was down 5 ½ cents, as pressure from very little weather threat in Brazil is a wet blanket over the market. Soybean meal was down 30 cents, as bean oil was 23 points in the red. Monthly WASDE data from USDA showed no changes to the US S&D table, with the US cash average prices dropped by 60 cents to $10.80. Argentina production was raised by 1 MMT, with Brazil left unchanged at 169 MMT as CONAB showed a slight uptick to 166.21 MMT for the country. The weekly Export Sales report tallied 2024/25 soybean bookings at 1.17 MMT, a sharp drop off from last week. That took the accumulated shipped and unshipped sales to 37.28 MMT. That is 75% of USDA’s expected export total for the marketing year, now even with the average pace. Commitment of Traders data showed managed money trimming another 13,897 contracts from their net short position in soybean futures and options as of 12/10. That position stood at 58,320 contracts by Tuesday.
Live cattle shot higher this week with the help from a stronger cash market, as February was up $5.85. Cash trade started early this week, with $191-192 in the South this week, a $1 increase from the week prior, as the North was $4 higher at $195-196. Feeders were the followers this time up$1.825 in the January contract on the week. The CME Feeder Cattle Index was up another 76 cents week/week to $262.59. Wholesale boxed beef prices were stronger this week, as the Chc/Sel spread narrowed to $32.53/cwt. Choice was up $4.35 (1.4%) to $316.39, while Select was $7.13 higher (2.6%) to $283.86. Weekly beef production was down 0.8% from last week and 3.9% below last year at 527.2 million lbs. Year to date production is down 0.5% on 3.7% fewer head sent to slaughter. Weekly Export Sales data indicated 10,989 MT of 2024 beef was sold in the week ending on December 5, with 5,409 MT sold for 2025. Shipments were tallied at 15,065 MT, a 3-week high. CFTC Commitment of Traders data showed spec funds adding 3,908 contracts to their net long at 126,308 contracts in live cattle futures and options as of Tuesday. In Feeder cattle, managed money added 1,012 contracts to their net long as of 12/10 to 19,866 contracts.
Hog bulls fought back on Friday, with February closing up 47 cents on the week. The CME Lean Hog Index was down just a penny this week at $83.92 as of December 11. USDA’s Pork Carcass Cutout was up $3.45 (3.8%) this week to $94.91, again mainly on the Friday move. Just the rib primal was reported lower, with the ham the driver to the upside, $9.85 higher. Pork production totaled 554.6 million lbs this week, down 1% from last week and 4.8% below last year. On the year, production is up 1.1%, with hog slaughter up 0.7%. Export Sales data showed pork bookings totaling 22,460 MT for 2024 and another 4,574 MT for 2025 in the week of December 5. Shipments were 33,755 MT, which was a 5-week high. The large managed money spec traders in lean hog futures and options cut back 2,748 contracts to retreat from their record net long as of 12/10. They took their net long to 130,759 contracts by Tuesday.
Cotton futures were not on the supportive end of the USDA report this week, with March slipping 84 points. Cotton Ginnings data tallied 2.825 million RB of cotton ginned in the last two weeks of November, taking the total to 9.678 million RB by 12/1, up 15% from the same point last year. USDA raised production on Tuesday by 70,000 bales to 14.255 million bales, which helped to raise the carryout projection by 100,000 bales to 4.4 million bales. Thursday’s Export Sales report showed cotton sales down again from last week at 152,989 RB of cotton sold in the week of 12/5. Shipments were back down to 137,408 RB. Commitments are now at 7.012 million RB, which is 66% of the USDA forecast, compared to the normal sales pace of 73% of USDA’s export projection by now. The FSA Adjusted World Price for cotton was back down 152 points this week, to 56.22 cents/lb. Friday’s Commitment of Traders data showed managed money adding back 5,840 contracts to their net short in cotton futures and options as of 12/10. They took that net position to 22,223 contracts as of last Tuesday.
Market Watch
Next week kicks off with the Monday morning Export Inspections report per normal. Monthly NOPA data will also be released on Monday morning. Skip ahead to Wednesday and the weekly EIA Petroleum Status Report will be published, with the December Fed rate decision out that afternoon. On Thursday morning, FAS will release the weekly Export Sales report. Friday afternoon will show the monthly Cattle on Feed Report from NASS.
Tech Talk: January Soybeans
January soybeans have been in a fairly tight trading range for the last month. The August low lateral support at $9.73 ½ has held on every (too many to count) test for the last 2 plus months. Stochsatics did have a buy signal, but the lack of futures movement has them back in neutral. The Bollinger bands are coming into a pinch, thanks to the lack of volatility, with the lower band at $9.78 ¾ and upper BB resistance at $10.00. The round number at $10 has been a pain lately, with the 40-day moving average at $9.95 ¾ also in the way for the bulls. There is a downtrend line off the May high at $9.96 ½, which has held several tests. With the tightening Bollinger bands and descending triangle formation coming to a head, something is going to give. We just don’t know directionality. A break to the upside would face an initial test at $10.15 ¼ via the 100-day moving average, with a downside break out looking at the weekly continuation chart uptrend support (not pictured) at $9.45.
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.
Mixed Bag. Ag Marketing Report 12/16/2024
Christmas is right around the corner. By this time next week, some people will be gathering with family to celebrate the holiday. Remembering back to my childhood, at the Christmas Eve church service, elders of the church would always pass out bags of goodies to the kids as we were ushered out. Most of the time there was the typical Christmas candy, as well as an apple or orange, mixed with peanuts and an assortment of tree nuts. I’m not sure who looked forward to it most, myself or my father, as he always picked out the peanuts for himself (weird how I find myself doing the same thing now). In general, it was a mixed bag, and you never knew what you were going to get. In a nutshell (pun intended), that was the ag markets this week. Some commodities were higher, some were lower, and others did a whole lot of nothing.
Corn faced some back and forth trade this week, but March managed to sneak out a gain of 2 cents. The market was busy pricing in a bullish USDA report, which was released on Tuesday and showed a few more bull-friendly numbers than expected. USDA raised both ethanol demand and exports by a combined 200 million bushels, which cut the ending stocks number by the same to 1.738 billion bushels. Bulls were busy taking money off the table the rest of the week. EIA data showed ethanol production up just slightly to 1.078 million barrels per day in the week of 12/6. Stocks of ethanol were back down 355,000 barrels to 22.648 million barrels. Export Sales data saw 2024/25 corn sales drop off to the lowest in 11 weeks at 946,863 MT for the week ending on December 5. That took export commitments to 35.14 MMT, which is 56% of the fresh US export forecast and still ahead of the average sales pace of 53%. Commitment of Traders data showed managed money funds in corn futures and options piling on 77,670 contracts to their net long as of 12/10. They held a net long of 165,890 contracts on Tuesday.
Wheat saw some mixed action this week as mid-week pressure capped gains and pressured the soft red wheat market. Chicago March was back down 5 cents on the week. March Kansas City posted a gain of 3 ¼ cents this week, with MPLS March was just 2 cents higher since last Friday. The early week strength came by way of a friendly USDA report, as the World Ag Outlook Board shocked the market with a 25 mbu increase to exports. A 5 mbu uptick to import limited the stocks cut to just 20 mbu, now at 795 million bushels. Thursday’s Export Sales report showed US wheat export business back down to 290,236 MT during the week of 12/5. That took export sale commitments to 15.698 MMT, which is now 69% of the USDA forecast for exports and still lagging the 76% average selling pace. The weekly Commitment of Traders report from CFTC tallied spec traders trimming back 2,607 contracts from their CBT wheat net short at 66,779 contracts by Tuesday. In KC wheat, they cut their net short by 1,994 contracts as of December 10 to 36,436 contracts.
Soybeans faced some product pressure this week, as USDA was relatively quiet on Tuesday. January was down 5 ½ cents, as pressure from very little weather threat in Brazil is a wet blanket over the market. Soybean meal was down 30 cents, as bean oil was 23 points in the red. Monthly WASDE data from USDA showed no changes to the US S&D table, with the US cash average prices dropped by 60 cents to $10.80. Argentina production was raised by 1 MMT, with Brazil left unchanged at 169 MMT as CONAB showed a slight uptick to 166.21 MMT for the country. The weekly Export Sales report tallied 2024/25 soybean bookings at 1.17 MMT, a sharp drop off from last week. That took the accumulated shipped and unshipped sales to 37.28 MMT. That is 75% of USDA’s expected export total for the marketing year, now even with the average pace. Commitment of Traders data showed managed money trimming another 13,897 contracts from their net short position in soybean futures and options as of 12/10. That position stood at 58,320 contracts by Tuesday.
Live cattle shot higher this week with the help from a stronger cash market, as February was up $5.85. Cash trade started early this week, with $191-192 in the South this week, a $1 increase from the week prior, as the North was $4 higher at $195-196. Feeders were the followers this time up$1.825 in the January contract on the week. The CME Feeder Cattle Index was up another 76 cents week/week to $262.59. Wholesale boxed beef prices were stronger this week, as the Chc/Sel spread narrowed to $32.53/cwt. Choice was up $4.35 (1.4%) to $316.39, while Select was $7.13 higher (2.6%) to $283.86. Weekly beef production was down 0.8% from last week and 3.9% below last year at 527.2 million lbs. Year to date production is down 0.5% on 3.7% fewer head sent to slaughter. Weekly Export Sales data indicated 10,989 MT of 2024 beef was sold in the week ending on December 5, with 5,409 MT sold for 2025. Shipments were tallied at 15,065 MT, a 3-week high. CFTC Commitment of Traders data showed spec funds adding 3,908 contracts to their net long at 126,308 contracts in live cattle futures and options as of Tuesday. In Feeder cattle, managed money added 1,012 contracts to their net long as of 12/10 to 19,866 contracts.
Hog bulls fought back on Friday, with February closing up 47 cents on the week. The CME Lean Hog Index was down just a penny this week at $83.92 as of December 11. USDA’s Pork Carcass Cutout was up $3.45 (3.8%) this week to $94.91, again mainly on the Friday move. Just the rib primal was reported lower, with the ham the driver to the upside, $9.85 higher. Pork production totaled 554.6 million lbs this week, down 1% from last week and 4.8% below last year. On the year, production is up 1.1%, with hog slaughter up 0.7%. Export Sales data showed pork bookings totaling 22,460 MT for 2024 and another 4,574 MT for 2025 in the week of December 5. Shipments were 33,755 MT, which was a 5-week high. The large managed money spec traders in lean hog futures and options cut back 2,748 contracts to retreat from their record net long as of 12/10. They took their net long to 130,759 contracts by Tuesday.
Cotton futures were not on the supportive end of the USDA report this week, with March slipping 84 points. Cotton Ginnings data tallied 2.825 million RB of cotton ginned in the last two weeks of November, taking the total to 9.678 million RB by 12/1, up 15% from the same point last year. USDA raised production on Tuesday by 70,000 bales to 14.255 million bales, which helped to raise the carryout projection by 100,000 bales to 4.4 million bales. Thursday’s Export Sales report showed cotton sales down again from last week at 152,989 RB of cotton sold in the week of 12/5. Shipments were back down to 137,408 RB. Commitments are now at 7.012 million RB, which is 66% of the USDA forecast, compared to the normal sales pace of 73% of USDA’s export projection by now. The FSA Adjusted World Price for cotton was back down 152 points this week, to 56.22 cents/lb. Friday’s Commitment of Traders data showed managed money adding back 5,840 contracts to their net short in cotton futures and options as of 12/10. They took that net position to 22,223 contracts as of last Tuesday.
Market Watch
Next week kicks off with the Monday morning Export Inspections report per normal. Monthly NOPA data will also be released on Monday morning. Skip ahead to Wednesday and the weekly EIA Petroleum Status Report will be published, with the December Fed rate decision out that afternoon. On Thursday morning, FAS will release the weekly Export Sales report. Friday afternoon will show the monthly Cattle on Feed Report from NASS.
Tech Talk: January Soybeans
January soybeans have been in a fairly tight trading range for the last month. The August low lateral support at $9.73 ½ has held on every (too many to count) test for the last 2 plus months. Stochsatics did have a buy signal, but the lack of futures movement has them back in neutral. The Bollinger bands are coming into a pinch, thanks to the lack of volatility, with the lower band at $9.78 ¾ and upper BB resistance at $10.00. The round number at $10 has been a pain lately, with the 40-day moving average at $9.95 ¾ also in the way for the bulls. There is a downtrend line off the May high at $9.96 ½, which has held several tests. With the tightening Bollinger bands and descending triangle formation coming to a head, something is going to give. We just don’t know directionality. A break to the upside would face an initial test at $10.15 ¼ via the 100-day moving average, with a downside break out looking at the weekly continuation chart uptrend support (not pictured) at $9.45.
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.