Tag Archives: markets

Summary

The market gets started with a shortened trading week. There was no trade on Monday in the US in observance of Martin Luther King Jr. Day.

The outside equities may have to trade on more stimulus hopes rather than hard data. Tuesday offers no major data releases and President Elect Biden’s Treasury pick, Janet Yellen is expected to make her pitch for the $1.9 trillion dollar stimulus plan to the Senate during her confirmation hearing. President Elect Biden will also be sworn into office on Wednesday.

As for the grain market the Monday overnight trade saw significant pullback in the soybean complex. Meal, oil and soybeans were down nearly 1.5% on most contracts. The pullback comes as weather patterns temporarily improve over parts of Argentina and Brazil. Although a La Nina pattern still seems to be in place over equatorial pacific waters the moisture may be short lived. Harvest is getting underway on the early planted soybeans in Mato Grasso, but the pace is extremely slow. The five year average has harvest pace around 5% complete however it’s estimated only 1% of harvest is complete. Still Stone X analysts believe that Brazil can have 1 MMT of new crop beans to the port for shipment by the end of the month.

Cash trade in the country last week developed on Wednesday following the Fed Cattle Exchange. The South saw trade at $110 to $111, the $111 was early but has been backed down to $110, $1 to $2 lower than last week’s weighted averages.

For the week ending January 09, 2021, Imported Beef Passed for Entry in the U.S. totaled 34,280, 133.91% of the previous week and 109.63% of the 4-week average.

Expected Slaughter numbers Tuesay

118,000 hd today 118,000 hd wk ago 124,288 hd yr ago

Hogs

495,000 hd today 496,000 hd wk ago 496,032 hd yr ago

Midday Carcass Value  Tuesday

Beef

Choice up 2.60 217.64

Select up 0.12 205.96

C/S Spread 11.68

Loads 81

Pork

Carcass up 0.07 78.59

Bellies dn 11.33 108.05

Loads 225

Grain Settlements

  • Corn
  • Soybeans
  • Chicago
  • Kansas City
  • Livestock Settlements
  • Live Cattle
  • Feeder Cattle
  • Lean Hogs
  • Class III Milk

 

Pre-Opening Market Broker Commentary

Mark Gold, Top Third Ag Marketing, believes grains are due a pullback and it could be happening now.


Jerry Stowell, Country Futures,  looks at what may impact the livestock futures today. Livestock will try to rally buyers to create follow through from last Friday.


Mike Zuzolo, Global Commodity Analytics, takes a look at the midday trade. Grains continue to selloff as the market realizes possible demand issues.


John Payne, Daniel’s Ag Marketing, takes a closer look at today’s grain close. Payne is not concerned with the recent pullback in grains. The long term picture is still inflationary and bullish.


Jack Fenske, York Commodities, looks at the closing market numbers.

The first overnight trading session of 2021 was on fire for the grains. Unfortunately the day trade brought a cooling to the market with grains ending the day mixed. Sue Martin with Ag and Investment joined the Fontanelle Final Bell on Monday to highlight some of the reasons why there may have been pull back after the strong overnight session. At the top of the list it may have simply been profit it taking with overnight traders running the corn market to nearly $5 and soybean market to $13.50.

Martin is also closely watching the weather and labor situations in South America. Temps in Argentina and Brazil continue to be hot and dry, but some area’s have seen mixed precipitation. As for the labor side the port strike may not actually be over in Argentina. Martin will be watching the loading of ready ships to see if that offers any idea of where labor stands in Argentine ports.

You can catch the full episode here:

Money flow continued to favor commodities and especially grains on the last full trading day of the week. Arlan Suderman, chief economist for Stone X, highlighted in the Fontanelle Final Bell why money flow continues to favor commodities like corn despite ample supplies and healthy stocks to use. M1 money supply has a great deal to do with the current state of the bullish market and right now commodities have the story with South American weather, and supply chain issues.

Aside from looking at the commodity sector Suderman also explored the macro market as it currently stands. At first glance the stimulus bill being sent back to Congress may have looked bearish, but it could actually be bullish with President Trump pushing for more direct cash stimulus to Americans. With this much money in the system though inflation is set to take off in 2021 if the pandemic can be placed under control and the economy can reopen. Suderman walks through what to be aware of with inflation and the markets.

Catch these and other important market comments here:

Soybeans continue to hold gains, but Tuesday may have showed some weakness in the bulls rally. Aaron Bertels with Crossroads Marketing joins the Fontanelle Final Bell to explore all aspects of the soybean trade. Including South American production and why it may not be the time to try and predict South American weather or production. Bertels also gives insight into what the current inversion of prices on the soybean futures means to farmers. 

From soybeans the conversation turns to corn and like soybeans stockpiles are an important piece to the puzzle. However there is still plenty of corn with most stock estimates holding above 1.5 billion bushels. Ethanol production continues to be sluggish in the US, but may not be that important to keeping corn above $4 in 2021. 

Bertels also shares his thoughts on what acreage intentions might look like in 2021 and how likely inflation is to hit commodities.

Catch the full conversation here:

Markets started off in risk off territory on Monday, but ended positive for most of the commodity complex. Mike Zuzolo, Global Commodity Analytics, highlights that it may have started as a buy the rumor sell the fact with Congress finally getting a stimulus package near the finish line. Then pushing the risk off button more was London moving back into lockdown with a new strain of Covid-19. At the end of the day with the World Health Organization reassuring traders that the new strain should not be of great concern with the vaccine rollout. That helped to get equities back positive and commodities followed.

Zuzolo also shares the latest information from his grower survey on planting intentions for 2021. The latest round of government aid may be the final decision some farmers have for corn or soybeans in 2021.

Zuzolo also touches on wheat and weather. There is a possibility the current La Nina could weaken into the 2021 growing season.

Catch all of Zuzolo’s market comments from the Final Bell here:

 

$14 soybeans and $5 always sound nice, but what is the reality the US market could ever get there? On the last trading Friday in 2020 Brian Splitt with Ag Market.Net highlights how technical indicators are poised to take a run at those prices. This comes as soybeans settle firmly above $12 and corn is once again aiming at $4.50.

Splitt also looks at improving fundamentals that continue to support the market. Including South American weather and demand. Above all else is the macro or broader market and there Splitt is closely watching currencies, including the US dollar.

Hear Splitt’s comments for your self right here:

 

The grain complex wasn’t the only market trying to close on highs of the day. Live cattle and feeder cattle also ended the day strong. Kyle Bumsted, Allendale Inc, joined the Fontanelle Final Bell to discuss why cattle were having a decent run up in the market.

There’s plenty of obstacles for the cattle markets to overcome currently including a cattle on feed report Friday. Bumsted isn’t overly concerned about the cattle on feed report believing the placements could be friendly to the market.

What Bumsted is currently interested in, is the fact the recent gains made in cattle are coming with an increase in open interest for most contracts. That would indicate new positions entering the market rather than shorts taking their money out of the market.

Bumsted is also closely watching how much the next stimulus package could mean for individuals. That could indicate how much disposable income they have ready to try and buy beef following the Christmas season. Looking at local grocery store prices Bumstead believes current beef prices on the shelf are very attractive to the consumer.

You can hear all of Bumsteads comments on the livestock markets here: