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Closing Comments



Closing Comments


Exporters sold 43.6 million bushels of corn in the week ending September 18, including 32.9 million bushels of this year’s crop, with the remainder being for next year’s crop. The current-year sales were up from 26.0 million bushels the previous week and up from the five-year average for the week of 21.0 million.

Marketing year sales to date total 546 million bushels, matching the previous year’s total. Sales to date exceed the seasonal pace needed to reach USDA’s target for the year ending August 31 by 3 million bushels, after trailing the pace by 3 million the previous week.

Exporters sold 2.9 million bushels of U.S. grain sorghum in the week ending September 18, down from an impressive 13.1 million the previous week, but up from the five-year average for the week of 1.4 million bushels. Sales to China accounted for 0.8 million bushels of the weekly total, while the remainder went to “unknown destinations.” However, the latter will largely be presumed to be end users within China who are trying to escape high corn prices back home as port authorities block imports of cheaper U.S. corn.

Marketing year grain sorghum sales to all destinations to date total 91.7 million bushels, which is up 140% from the previous year and already 46% of USDA’s target for the year ending August 31. The bulk of the increase in demand can be attributed to Chinese end users seeking an acceptable alternative to high-priced domestic corn supplies.

December corn held just above its recent contract lows, but settled near session highs. The market will presume some increased harvest selling over the weekend in tomorrow’s trade, but traders are also watching money flow in the broader markets. Even so, the path of least resistance remains lower as harvest slowly gains momentum with impressive yields. Next meaningful support is at $3, but I’m not optimistic at all that that support will hold, based on both yields and money flow factors.


Exporters sold 94.3 million bushels of soybeans in the week ending September 18, up from 53.9 million the previous week and up from the five-year average for the week of 34.4 million bushels. Sales to China accounted for 87.6 million bushels of the weekly total. It was largely expected.

A Chinese delegation tends to visit the U.S. soy industry each year, making a large purchase that makes for good headlines, but does little to materially alter the previously anticipated soybean fundamentals. In fact, weekly sales for the same week last year totaled 103.5 million bushels.

Marketing year sales to all destinations total 1.030 billion bushels, up 86 million or 16% from the previous year. Sales to date exceed the seasonal pace needed to reach USDA’s target by August 31 by 371 million bushels, versus 327 million the previous week.

Exporters typically sell 39% of final soybean shipments by the third week of the soybean marketing year, whereas they had sold 57% by this point last year. However, exporters have already sold 61% of USDA’s target for the current year, suggesting that USDA may need to further increase its export target. This year’s export sales to date total is a record for the soybean industry.

USDA’s daily export reporting service today reflected more sales to China. Exporters reportedly sold another 4.2 million bushels of U.S. soybeans to China in the past 24 hours, adding to their already large total. Export shipments are expected to tax our export delivery system once sufficient new-crop supplies become available in the weeks ahead.

Brazil’s government expects next year’s soybean crop to come in between 90 and 96 million metric tons. That compares with this year’s crop of 86.7 mmt. However, the official Brazil estimate is at the lower end of other estimates. USDA currently projects next year’s Brazil crop at 94 mmt, with local private estimates between 95 and 100 mmt. Obviously adverse weather could change the outlook, but at this point one has to assume a normal growing season, which is not friendly for prices near-term.

Palm oil rose to six week highs overnight, supporting the soyoil market. However, soybeans fell out of bed once strength in the soyoil market evaporated, with traders focusing again on big yields coming in for this year’s crop. November made new contract lows yet again, despite being oversold. Nobody wants to be long (bought) in the current environment, with production estimates soaring for both this year’s U.S. and next year’s Brazilian crops.


Exporters sold 14.6 million bushels of wheat in the week ending September 18, up from 11.6 million the previous week, but down from the five-year average for the week of 23.9 million bushels. The data included another sale of 4.4 million bushels of U.S. hard red winter wheat to Brazil.

Marketing year sales of U.S. wheat to all destinations total 472 million bushels, down 178 million or 27% from the previous year. Yet, sales to date exceed the seasonal pace needed to reach USDA’s historically low target by May 31 by 25 million bushels, although that is down from 30 million the previous week.

USDA’s daily export reporting service today included more sales to show up in next week’s weekly report. Exporters reportedly sold another 4.4 million bushels of U.S. wheat, likely hard red winter, to Nigeria.

Chicago wheat gave way to weaker corn and a strong dollar, dropping to new contract lows. However, Kansas City wheat found support from strengthening demand at current price levels, boosted by this morning’s Nigerian purchase. Confidence in the current bottoming action remains tepid in the face of the strong dollar and declining corn prices, with lower prices possible amid a lack of supportive headlines.


Exporters sold a net 12.3K metric tons of beef in the week ending September 18, down from 15.7K the previous week and a three-week low. Yet, sales are remaining reasonably good, considering the strength of the U.S. dollar. Actual shipments during the week totaled 13.4K tons, down from 14.8K the previous week, but up from 12.9K in the same week last year.

Live cattle futures continue to find support at $157.45 on the December chart. That’s building underlying support, leading some traders to begin to test the upside. Fundamentally, these traders are garnering support from trade chatter that the product market may be bottoming. Wednesday’s boxed beef movement reached an 18-month high, with prices showing signs of finding firm footing. Near-term, the week product prices have packer losses estimated at $85.95 per head.

Boxed beef movement reached 281 loads Wednesday, up from 233 loads the previous day and up from 237 loads the previous week. Choice cuts were down just $0.04 to $239.13 per cwt Thursday, while Select cuts were down another $0.98 to $226.31 per cwt. That firmed the Choice/Select spread to $12.82 per cwt. Boxed beef movement at mid-morning today was good at 132 loads, with Choice cuts up $0.22, while Select cuts were down $0.52 per cwt.

October feeder cattle posted a new contract high today, but upward momentum is tough to sustain amid the uncertainty of the fat cattle market, as well as the financial markets and the strong dollar. The cash feeder cattle market is also showing signs of lost upward momentum, even though corn prices continue to fall. The latest CME cash index came in at $230.24 per cwt, down $0.15 from the previous day’s record high.

The cash market largely remains quiet, Packers have reportedly firmed their bid to $157 per cwt on a live basis in Kansas, down $2 from the previous week. Trade sentiment suggests that we could continue recent weakness with cash trade $1 to $2 lower this week, but that could change if the board is able to sustain some upward momentum. It could not today, keeping talk of steady to weaker cash prices intact.


Exporters sold a solid 20.3K metric tons of pork in the week ending September 18. The total is down from 22.9K tons the previous week, but it’s still a strong total, especially considering the strength of the U.S. dollar, which is trading at four-year highs.

In fact, pork export sales have been exceptional for much of the past two months. That’s remarkable considering the strength of the dollar and the lack of sales to Russia, although I suspect that some of these sales are finding their way to Russia through third parties. Actual shipments to all destinations during the week totaled 15.5K tons, down from 17.8K the previous week, but up from 8.4K in the same week last year.

Strong product demand is boosting packer margins, currently estimated at a strong $15.25 per head. This week’s cold storage report showed that supplies in the freezer are more than adequate, but the strength of current demand is supporting a healthy rebound in product prices.

Product movement reached 427 loads Wednesday, up from 402 loads the previous day and up from 400 loads the previous week. The composite pork product price rose $0.60 to $117.43 per cwt, which is its highest level since August 11. The composite price is up $14.75 per cwt from its August 25th low. Movement at midday today was routine at best at 157 loads. The product market was quietly mixed, with the composite price down $0.15 to $117.28 per cwt.

Today’s Midwest cash market was mostly steady, although the closely watched Iowa/Southern Minnesota market was steady to 50 cents higher and southeast Ohio was steady to $1 higher. The latest CME 2-day lean hog index was up $0.75 to $106.54 per cwt, showing a bit more upward momentum over the past couple days. The index has been higher for the past 14 trading days, with gains over that period totaling $11.09 per cwt.

Selling accelerated ahead of tomorrow’s USDA quarterly hogs and pigs report when the December contract broke below its recent trading range primarily between $94 and $96 per cwt. Traders were bailing out of the market ahead of tomorrow’s USDA quarterly hogs and pigs report. Trade expectations for the report are below, but traders saw USDA’s tendency for throwing a curve ball play out a year ago, putting some fear of them ahead of tomorrow’s report.

September 26 Quarterly Hogs & Pigs


Trade Est.


percent of previous year

All hogs September 1



Kept for Breeding



Kept for Market



Pig Crop

June to August



Weight Groups

Under 50 lbs.



50 to 119 lbs.



120 to 179 lbs.



Over 180 lbs.




June to August



Farrowing Intentions

September to November



December to February



Pigs per Litter

June to August



Closing Market Snapshot


All opinions expressed in this commentary are solely those of Water Street Advisory. This data and these comments are provided for information purposes only and are not intended to be used for specific trading strategies. Although all information is believed to be reliable, we cannot guarantee its accuracy or completeness. There is significant risk of loss involved in commodity futures and options trading and may not be suitable for all investors.




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Arlan Suderman | Senior Market Analyst
WATER STREET ADVISORY® | www.waterstreet.org
(316) 729-4599 | asuderman@waterstreet.org


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