One book that is on my reading list is The Hunt for Red October, part of the Jack Ryan series by Tom Clancy. While I have yet to read it, though it is on my nightstand, the last part of the title seems a little too fitting for this week. Not only have there been fires rolling across parts of the Midwest (specifically hitting pretty close to where I was raised), but the market seems to be having a Red October of its own. Of the main ag commodities, just meal and hogs saw gains this week, with the grains and oilseeds leading the way to the downside and approaching some lows from August in the corn and soybean case. While we have found the red October in this case, the hunt is now for the low!
Corn futures faded lower again this week, as December was down 11 cents (2.65%) since last Friday and undergoing a test of $4. That was even as the USDA reported several daily private export sale announcements totaling 2.378 MMT (1.79 MMT for 2024/25 and 0.579 MMT for 2025/26) to Mexican and unknown buyers. The Tuesday version of the weekly Crop Progress report showed 47% of the US corn crop harvested by October 13, ahead of the 39% average. Condition ratings were steady at 64% gd/ex in their final update of the growing season, with the Brugler500 index up 2 points at 363. EIA data showed ethanol production up another 4,000 barrels per day to 1.042 million bpd in the week that ended on October 11. Stocks of ethanol were back up 121,000 barrels to 22.275 million barrels. Export Sales data tallied new crop sales improving to 2.226 MMT in the week ending on October 10. That took export commitments to 19.875 MMT, which is 34% of the US export forecast and lagging the average sales pace of 36%. That has played catch up in recent weeks. Weekly Commitment of Traders data showed managed money piling back on 63,259 contracts to their net short in corn futures and options during the week that ended on October 15. On that Tuesday, they held a net short of 86,988 contracts.
Wheat was a weak spot for the bulls this week as late week pressure came in the push things lower. Chicago December was 26 1/4 cents lower (-4.38%) for the week. December Kansas City saw a loss of 23 3/4 cents (-3.93%) this week. MPLS Dec was down 27 ¼ cents from last Friday (-4.23%). Crop Progress data tallied the winter wheat crop at 64% plated by last Sunday, 2% behind normal. Emergence was 35% complete, vs. the 38% average pace. Export Sales data indicated US export business picking up for the week that ended on 10/10 to 504,112 MT. That was a 7-week high and took export sale commitments to 12.66 MMT, which is just 55% of the USDA forecast for export and lagging the 60% average. CFTC’s Commitment of Traders report showed CBT wheat spec traders trimming back 3,436 contracts from their net short to 26,013 contracts as of 10/15. In KC wheat, they added back 604 contracts to their net short position to 6,488 contracts as of Tuesday.
Soybeans extended their slide this week, as November was down another 35 1/2 cents (-3.53%), for a 3-week loss nearly a dollar. Soybean meal steady this week, with December back up just 50 cents/ton (0.16%). Bean oil was a pressure factor for the beans, down 151 points (-3.48%) on the week. This week’s Crop Progress report showed 67% of the US soybean harvest complete by October 13, well ahead of the 51% average pace. NOPA showed monthly crush of 177.32 mbu among its members, well above trade estimates and a monthly record. Bean oil stocks were down 3.74% from a year ago at 1.066 million lbs. Export Sales data showed new crop business back out to the largest in 4 weeks at 1.703 MMT. That took the accumulated shipped and unshipped sales to 21.841 MMT. That is 43% 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 adding back 18,543 contracts to their net short position as of Tuesday, to 40,341 contracts.
Live cattle saw some mixed around trade this week, with December slipping just 25 cents (0.13%). Cash trade was mostly $188 in the South, up $1-2, with trade in the North at $188, steady to up $1 from last week. Feeders were feeling a little pressure, losing $2.20 (-0.88%) this week in the November contract. The CME Feeder Cattle Index was up another 75 cents week/week to $250.80. Wholesale boxed beef prices were stronger again this week, as Choice was up $9.43 (3%) on the week to $320.65, while Select was $5.48 higher to $294.20. Weekly beef production was back up 3.9% from the previous week but 1.3% below the same week last year at 523.5 million lbs. That left the YTD beef production down 0.7% from the same time a year ago, with cattle slaughter down 3.8%. Export sales of beef totaled 14,100 MT in the week of 10/10, a slight 2.55% increase from the week prior. Shipments totaled 15,300 MT in that week, a reduction of 4.5% from the previous week. Commitment of Traders data tallied cattle managed money adding 8,703 contracts to their net long at 85,729 contracts as of 10/15. Specs in feeder cattle added to their net long by 1,136 contracts to 8,840 contracts as of Tuesday.
Hogs saw some positive traction this week with December gaining 17 cents (0.23%) The CME Lean Hog Index was down another 63 cents this week at $83.84 as of October 17. USDA’s Pork Carcass Cutout was back up $2.12 this week to $96.59. The belly primal was the main driver, up $13.51, with the loin, butt, and picnic all lower this week. Weekly pork production was up 1.3 from last week and 0.1% above the same week last year at 555.7 million lbs. YTD hog slaughter has run 1.% above last year, with pork production 1.6% higher. Pork export sales totaled 38,100 MT in the week of October 10, which was a drop of 24.8% from last week. Export shipments totaled 34,000 MT, a 49.2% increase from the last week. Managed money spec funds in lean hog futures and options added another 4,388 contracts to their net long position as of October 15 to a net long 74,987 contracts.
Cotton futures extended their pull back this week, with December down 122 points (-1.69%). This week’s Crop Progress report showed 88% of the US cotton crop with bolls open by 10/13 and 34% of the crop harvested. Condition ratings were 5% higher to 34% gd/ex, with the Brugler500 index back up 11 points 294. Export Sales data showed an improvement in bookings during the week of October 10 to 159,769 RB, a 78.3% hike from the week prior. Export shipments were just 57,834 RB in that week, a MY low. Total commitments for upland cotton are 5.304 million RB, which is 49% of the USDA forecast. Normally sales would be 60% of USDA’s export projection by now. The FSA trimmed the Adjusted World Price for cotton by 117 points on Thursday, to 59.24 cents/lb. Weekly data from CFTC showed managed money spec funds in cotton futures and options adding back 741 contracts to their net short as of October 15. By that Tuesday they were net short just 12,664 contracts.
Market Watch
Next week will be back to normal with the weekly Export Inspections report leading things off on Monday morning and the Crop Progress report out in the afternoon. Tuesday will show the bi monthly Cotton Ginning report. Fast Forward to Wednesday and the EIA will release their Weekly Petroleum Status Report in the morning. USDA will release the weekly Export Sales report on Thursday morning. Friday will see the monthly Cattle on Feed and Cold Storage reports batting cleanup, with November grain/oilseed options expiring.
Tech Talk: December Corn
December corn has fallen 35 cents to Thursday’s low from the high posted at the beginning of the month. That was a test of $4 that spiked to $3.99 and ended up holding. There is a 61.8% fib retracement support off the August low at $4.03 ¾ that was spiked on Tuesday’s weakness, but futures rallied right back above it on Wednesday. Stochastics argue for holding here and getting a rally at least to test the Bollinger midline at $4.17 ¼. ADX is at 41 and would argue for a look at the bearish MACD and suggest we fill the gap from the week chart at $3.94 and test the 78.6% Fib retracement support at $3.955. The fact that futures helped (only down 2) with double digit weakness in the bean and wheat would suggest futures want to obey the crossing in oversold stochastics.
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.
Red October. Ag Marketing Report 10/21/2024
One book that is on my reading list is The Hunt for Red October, part of the Jack Ryan series by Tom Clancy. While I have yet to read it, though it is on my nightstand, the last part of the title seems a little too fitting for this week. Not only have there been fires rolling across parts of the Midwest (specifically hitting pretty close to where I was raised), but the market seems to be having a Red October of its own. Of the main ag commodities, just meal and hogs saw gains this week, with the grains and oilseeds leading the way to the downside and approaching some lows from August in the corn and soybean case. While we have found the red October in this case, the hunt is now for the low!
Corn futures faded lower again this week, as December was down 11 cents (2.65%) since last Friday and undergoing a test of $4. That was even as the USDA reported several daily private export sale announcements totaling 2.378 MMT (1.79 MMT for 2024/25 and 0.579 MMT for 2025/26) to Mexican and unknown buyers. The Tuesday version of the weekly Crop Progress report showed 47% of the US corn crop harvested by October 13, ahead of the 39% average. Condition ratings were steady at 64% gd/ex in their final update of the growing season, with the Brugler500 index up 2 points at 363. EIA data showed ethanol production up another 4,000 barrels per day to 1.042 million bpd in the week that ended on October 11. Stocks of ethanol were back up 121,000 barrels to 22.275 million barrels. Export Sales data tallied new crop sales improving to 2.226 MMT in the week ending on October 10. That took export commitments to 19.875 MMT, which is 34% of the US export forecast and lagging the average sales pace of 36%. That has played catch up in recent weeks. Weekly Commitment of Traders data showed managed money piling back on 63,259 contracts to their net short in corn futures and options during the week that ended on October 15. On that Tuesday, they held a net short of 86,988 contracts.
Wheat was a weak spot for the bulls this week as late week pressure came in the push things lower. Chicago December was 26 1/4 cents lower (-4.38%) for the week. December Kansas City saw a loss of 23 3/4 cents (-3.93%) this week. MPLS Dec was down 27 ¼ cents from last Friday (-4.23%). Crop Progress data tallied the winter wheat crop at 64% plated by last Sunday, 2% behind normal. Emergence was 35% complete, vs. the 38% average pace. Export Sales data indicated US export business picking up for the week that ended on 10/10 to 504,112 MT. That was a 7-week high and took export sale commitments to 12.66 MMT, which is just 55% of the USDA forecast for export and lagging the 60% average. CFTC’s Commitment of Traders report showed CBT wheat spec traders trimming back 3,436 contracts from their net short to 26,013 contracts as of 10/15. In KC wheat, they added back 604 contracts to their net short position to 6,488 contracts as of Tuesday.
Soybeans extended their slide this week, as November was down another 35 1/2 cents (-3.53%), for a 3-week loss nearly a dollar. Soybean meal steady this week, with December back up just 50 cents/ton (0.16%). Bean oil was a pressure factor for the beans, down 151 points (-3.48%) on the week. This week’s Crop Progress report showed 67% of the US soybean harvest complete by October 13, well ahead of the 51% average pace. NOPA showed monthly crush of 177.32 mbu among its members, well above trade estimates and a monthly record. Bean oil stocks were down 3.74% from a year ago at 1.066 million lbs. Export Sales data showed new crop business back out to the largest in 4 weeks at 1.703 MMT. That took the accumulated shipped and unshipped sales to 21.841 MMT. That is 43% 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 adding back 18,543 contracts to their net short position as of Tuesday, to 40,341 contracts.
Live cattle saw some mixed around trade this week, with December slipping just 25 cents (0.13%). Cash trade was mostly $188 in the South, up $1-2, with trade in the North at $188, steady to up $1 from last week. Feeders were feeling a little pressure, losing $2.20 (-0.88%) this week in the November contract. The CME Feeder Cattle Index was up another 75 cents week/week to $250.80. Wholesale boxed beef prices were stronger again this week, as Choice was up $9.43 (3%) on the week to $320.65, while Select was $5.48 higher to $294.20. Weekly beef production was back up 3.9% from the previous week but 1.3% below the same week last year at 523.5 million lbs. That left the YTD beef production down 0.7% from the same time a year ago, with cattle slaughter down 3.8%. Export sales of beef totaled 14,100 MT in the week of 10/10, a slight 2.55% increase from the week prior. Shipments totaled 15,300 MT in that week, a reduction of 4.5% from the previous week. Commitment of Traders data tallied cattle managed money adding 8,703 contracts to their net long at 85,729 contracts as of 10/15. Specs in feeder cattle added to their net long by 1,136 contracts to 8,840 contracts as of Tuesday.
Hogs saw some positive traction this week with December gaining 17 cents (0.23%) The CME Lean Hog Index was down another 63 cents this week at $83.84 as of October 17. USDA’s Pork Carcass Cutout was back up $2.12 this week to $96.59. The belly primal was the main driver, up $13.51, with the loin, butt, and picnic all lower this week. Weekly pork production was up 1.3 from last week and 0.1% above the same week last year at 555.7 million lbs. YTD hog slaughter has run 1.% above last year, with pork production 1.6% higher. Pork export sales totaled 38,100 MT in the week of October 10, which was a drop of 24.8% from last week. Export shipments totaled 34,000 MT, a 49.2% increase from the last week. Managed money spec funds in lean hog futures and options added another 4,388 contracts to their net long position as of October 15 to a net long 74,987 contracts.
Cotton futures extended their pull back this week, with December down 122 points (-1.69%). This week’s Crop Progress report showed 88% of the US cotton crop with bolls open by 10/13 and 34% of the crop harvested. Condition ratings were 5% higher to 34% gd/ex, with the Brugler500 index back up 11 points 294. Export Sales data showed an improvement in bookings during the week of October 10 to 159,769 RB, a 78.3% hike from the week prior. Export shipments were just 57,834 RB in that week, a MY low. Total commitments for upland cotton are 5.304 million RB, which is 49% of the USDA forecast. Normally sales would be 60% of USDA’s export projection by now. The FSA trimmed the Adjusted World Price for cotton by 117 points on Thursday, to 59.24 cents/lb. Weekly data from CFTC showed managed money spec funds in cotton futures and options adding back 741 contracts to their net short as of October 15. By that Tuesday they were net short just 12,664 contracts.
Market Watch
Next week will be back to normal with the weekly Export Inspections report leading things off on Monday morning and the Crop Progress report out in the afternoon. Tuesday will show the bi monthly Cotton Ginning report. Fast Forward to Wednesday and the EIA will release their Weekly Petroleum Status Report in the morning. USDA will release the weekly Export Sales report on Thursday morning. Friday will see the monthly Cattle on Feed and Cold Storage reports batting cleanup, with November grain/oilseed options expiring.
Tech Talk: December Corn
December corn has fallen 35 cents to Thursday’s low from the high posted at the beginning of the month. That was a test of $4 that spiked to $3.99 and ended up holding. There is a 61.8% fib retracement support off the August low at $4.03 ¾ that was spiked on Tuesday’s weakness, but futures rallied right back above it on Wednesday. Stochastics argue for holding here and getting a rally at least to test the Bollinger midline at $4.17 ¼. ADX is at 41 and would argue for a look at the bearish MACD and suggest we fill the gap from the week chart at $3.94 and test the 78.6% Fib retracement support at $3.955. The fact that futures helped (only down 2) with double digit weakness in the bean and wheat would suggest futures want to obey the crossing in oversold stochastics.
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.