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Closing Comments



Closing Comments


Exporters shipped 34.4 million bushels of corn in the week ending August 28, the last full week of the 2013-14 marketing year. The total came short of the 43.4 million bushels shipped the previous week, but it was well-above the five-year average for the week of 29.4 million bushels. A little over 104K bushels of corn were shipped from the U.S. interior to China in the week.

Marketing year shipments total 1.843 billion bushels, up 1.147 billion or 165% from the previous year. It will take some weeks before we see the official Census Bureau data for the 2013-14 marketing year, but the USDA data would suggest that old-crop corn shipments will come in modestly above USDA’s target for the year. The focus will now shift to new-crop corn export shipments, which will likely be limited by a focus on soybean shipments until we get to mid-winter, when feed grain shipments should surprise.

Exporters shipped 6.2 million bushels of U.S. grain sorghum in the week ending August 28, down from 9.5 million the previous week, but up from the five-year average for the week of 2.3 million bushels. The entire amount was destined for end users in China who are trying to avoid high-priced corn within China. This brings marketing year shipments to all destinations to 202 million bushels, up 131 million or 185% from the previous year and on pace to hit USDA’s target for the year.

USDA is scheduled to release its weekly crop progress data at 3 p.m. CDT this afternoon. A survey of trade participants revealed expectations that corn ratings will be unchanged on the week. However, I look for another modest contra-seasonal increase in the ratings, similar to last week.

Early harvest results have been very good. There have been a few exceptions, but the bulk of the harvest results from the South and from the southwestern Midwest have been 20 to 30 bushels over trend in the respective regions. Traders are waiting to hear more reports from the Southern Midwest over the next week to 10 days, but thus far the data continues to support big yields.

December corn found buying support overnight when it failed to probe support at $3.62. However, selling returned when it failed to even come close to testing last week’s high of $3.69. The contract continues to trade in the bottom third of its recent trading range, suggesting a likely break to the downside in the days ahead.


Exporters shipped 1.4 million bushels of soybeans in the week ending August 28, down from 5.3 million the previous week and down from the five-year average for the week of 10.3 million bushels. Marketing year shipments for the final week of the 2013-14 year total 1.595 billion bushels, up 282 million or 22% from the previous year. Again, we’ll need to wait for official Census Bureau data, but it appears that final shipments may fall a few million bushels shy of USDA’s target for the year.

The focus now shifts to the 2014-15 marketing year, where export sales suggest a robust fall shipping season, once new-crop supplies become available in sufficient quantities. For the time being, many of the newly harvested soybeans in the Delta are flowing north toward processors in the Midwest.

November soybeans rallied after selling dried up overnight just above last week’s contract low of $10.1975. Supplies remain tight ahead of the Midwest harvest and traders wanted to see this afternoon’s USDA crop progress data for more information on the scope of Sudden Death Syndrome problems in the southern Midwest.

The contract pulled back though when buying interest dried up on a probe just above last week’s high of $10.37. Buying interest dried up at that point on huge yields reported in the Delta, suggesting that Midwest yields could also be big.

But first we need to see what the scope of damage done by white mold and Sudden Death Syndrome. Those losses aren’t expected to be bullish, but they could make supply and demand fundamentals less bearish. Regardless, the path of least resistance remains lower yet at this point.


Exporters shipped 28.4 million bushels of wheat in the week ending August 28, up from 21.2 million the previous week, but up from the five-year average for the week of 26.2 million. Brazil stepped up shipments during the week, with 4.646 million destined for the South American buyer.

Marketing year shipments to all destinations total 240 million bushels, down 102 million or 30% from the previous year. Shipments to date exceed the seasonal pace needed to reach USDA’s target by May 31 by 14 million bushels, up from 6 million the previous week.

The war in Ukraine continues to escalate, but nothing happened over the weekend to threaten exports from the Black Sea region. As such, traders removed risk premium put in ahead of the weekend, but neither were they eager to push to new lows. Wheat remains range-bound. Support could come from drought in Russia, but thus far traders are more focused on beneficial rains in the Plains winter wheat belt, which is expected to remain the focus as long as corn prices are working lower.

Egypt released another snap tender this afternoon to buy wheat for early October shipment. Look for Black Sea supplies to be favored once again in the purchase.


Live cattle futures surged higher following the three-day holiday weekend, but then spent the bulk of the day working lower off the early highs. Strength came from surprisingly good cash trade, with some late Friday cash trade at $158 per cwt on a live basis. August went off the board Friday, leaving the October contract with some work to do to catch up. The rally nearly completed a 62% retracement of the August collapse before pulling back.

The trade expects a much larger captive supply, now that we’ve turned the calendar to September. Record weights are also expected on that larger supply. Now it’s time to see if the trade is right, or whether supply will again fall short, just as it did in July, and again in August. Meanwhile, traders are watching to see how aggressive retailers on in restocking their shelves after the Labor Day holiday, which should provide clues on demand during the final summer holiday grilling weekend.

Product movement last week totaled a calendar year high of 981 loads, up from 889 loads the previous week. Choice cuts finished the week at $246.30 per cwt, down $3.47 from the previous week. Select cuts were at $234.39 per cwt, down $5.27 on the week. The Choice/Select spread finished the week at $11.91 per cwt, up $1.80 on the week and the spread’s strongest level since May 8. Movement at mid-morning today was strong at 115 loads. Choice cuts were up $0.41 per cwt, while Select cuts were up $0.81.

Feeder cattle were higher on strength in the fat cattle market and expectations of cheaper corn down the road. September feeder cattle are poised for a possible retest of their contract high of $224.675. The latest CME cash index came in at $215.81 per cwt, up $0.28 on the day and down about $7 from this summer’s record high.


Packer margins are estimated at $13.55 per cwt, but thus far they haven’t needed to use that money to chase the market. Supplies remain adequate to meet demand, although speculative traders were again buying on ideas that we are carving out a low in the cash market ahead of declining supplies later this month.

Producers, fearing lower prices, continue to pull hogs forward, with carcass weights down to 212 pounds, up about 4.4% from the previous year, but not the 5 to 6% spread seen this summer. Today’s cash market was steady for the second trading day in a row, suggesting that the cash index should soon find stability. The latest CME cash index came in at $97.56 per cwt, down another $1.30 on the day. It was the 31st consecutive trading day with a lower index, with losses over that period totaling $36.61 per cwt.

Product movement last week totaled 1,604 loads, down from the previous week’s strong 1,727 loads and a three-week low. The composite product price firmed late in the week, ending the week at $101.72 per cwt, down $1.88 on the week. Movement at midday today was a modest 161 loads, with the composite price down $0.18 to $101.54 per cwt.

Closing Market Snapshot


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