The futuresone.com Weekly Ag Market Breakdown

The futuresone.com Weekly Ag Market Breakdown
By David M. Fiala
Thursday, October 23, 2014
CORN
Dec 14 Support:
Dec 15 Support:
333
381
Resistance:
Resistance:
371
414
Corn trade has been sideways to higher this week building on the gains from last
week. Going into to Thursday, December futures are 5 cents higher on the week. The
weekly USDA progress numbers indicated 93% of the crop is mature versus on 94%
average, and 31% harvested versus the 53% average. Harvest progress should pick-up to
being near normal by the end of October with dryer weather currently forecast and more
producers finishing up soybean harvest and focusing on corn. Yield reports have
continued to be strong, although some areas have been more variable due to late planting,
excessive wet, and disease issues. The weekly export inspections were ok at 717,605
metric tons. The weekly export sales were strong at 1.03 million metric tons. The weekly
ethanol production was 1.24% higher, stocks were 2.27% lower, and gasoline demand
was 2.9% lower. Ethanol margins for producer and blender are under pressure but overall
remain positive. Trade is near full carry right now which should continue until harvest
passes the halfway point with plenty of nearby bushels available. On the December chart,
support is the 10-day moving average at $3.48, and then the 20-day at $3.38. Resistance
is the $3.61 2-month high printed on Wednesday morning. Hedgers, call us to discuss
your individual situation. It is always a good time to revise or create your current plan
and discuss a future hedging plan.
Copyright 1998-2014, David Fiala. Reproduction of this document is strictly prohibited without permission of David Fiala. Opinions
subject to change without notice, anyone must fully understand the risk of loss and margin required before utilizing futures and
futures options. This can be considered a solicitation.
SOY COMPLEX
Nov Support:
Dec Meal:
Dec Oil:
914
311
3115
Resistance: 1007
Resistance: 367
Resistance: 3305
Soybean trade has pushed higher to start the week on planting concerns in South
America and good nearby demand. Upside has been limited by harvest pressure. Going
into Thursday November futures are 11 cents higher, meal is $8 higher, and oil is 8 points
higher. The weekly export inspections were exceptional at 1,991,537 metric tons. The
weekly export sales were 2.17 million metric tons of beans, 23,000 of meal, and 10,600
of oil. Crop progress on Monday showed 91% dropping leaves which is in line with the
5-year average. Harvest progress was at 53% versus 66% on average. South American
soybean planting is just getting underway in Brazil with hot and dry conditions slowing
early progress with an upturn in rains projected for this week. Soybeans are expected to
gain planted area at the expense of corn in South America this year with the bulk of
plantings in November and December. November chart support is the 10-day moving
average at $9.51, then the 20-day at $9.37. Resistance is the 50-day moving at $9.82.
Hedgers call with any questions.
Copyright 1998-2014, David Fiala. Reproduction of this document is strictly prohibited without permission of David Fiala. Opinions
subject to change without notice, anyone must fully understand the risk of loss and margin required before utilizing futures and
futures options. This can be considered a solicitation.
WHEAT
Kansas City Dec:
Chicago Dec:
Minneapolis Dec:
Support: 580
Support: 492
Support: 550
Resistance: 627
Resistance: 544
Resistance: 593
Wheat trade has worked higher to start the week but is not moving real fast. The
December contract net weekly changes going into Thursday are 6 cents higher on Chicago,
KC is 5 higher, and Minneapolis is 2 lower. The Russian/Ukraine situation has been quiet
on the political and weather front, while Australia continues to battle dryness over 15-20%
of the growing area. The US winter wheat crop is 76% planted versus 77% on average with
56% emerged versus 50% on average. Kansas has fallen a little behind on planting with the
recent rains but substantial progress should be made this week. The weekly export
inspections were ok at 481,878 metric tons. The weekly export sales were 299,400 metric
tons which was low; this may limit upside going into the weekend. The US Dollar has
bounced substantially this week crimping export competitiveness. Global and domestic
supplies remain large which should limit upside albeit the market appears to be finding a
value range this fall. Hedgers call with questions.
Copyright 1998-2014, David Fiala. Reproduction of this document is strictly prohibited without permission of David Fiala. Opinions
subject to change without notice, anyone must fully understand the risk of loss and margin required before utilizing futures and
futures options. This can be considered a solicitation.
CATTLE
Support on Dec:
Support Nov Feeders:
16037
22867
Resistance: 17357
Resistance: 24132
Live Cattle trade has worked higher to start the week in choppy trade while feeder
cattle have remained very volatile. For the week, the December Live Cattle are $3.20 with
November feeders $1.20 higher. Cash cattle trade has been slow with to develop again with
tighter showlists and poor packer margins limiting interest. The cutout activity has been
sideways with choice currently at $251 and select at $235, staying within the range we
have seen the past month. Boxed beef demand has softened a bit, with packer margins
staying under pressure, and the end of the year is typically softer for beef demand. The
board cattle crush margins looking into 2015 are negative but the softer feeder cattle trade
recently has helped. The feeder cattle have not been able to challenge the higher end of the
range, while live cattle remain near the record highs. Hedgers or speculators call to discuss
your individual situation in this historic market.
Copyright 1998-2014, David Fiala. Reproduction of this document is strictly prohibited without permission of David Fiala. Opinions
subject to change without notice, anyone must fully understand the risk of loss and margin required before utilizing futures and
futures options. This can be considered a solicitation.
LEAN HOGS
Support on Dec:
Support on Feb:
8665
8507
Resistance: 9295
Resistance: 8927
Lean hog trade has been active to start the week with selling pressure to start the
week from increased amounts of ready hogs available before bargain hunting triggered
some buying on Wednesday. The December contract is $2.40 lower on the week. The
cutout has slipped with increased amounts of fresh pork becoming available to meet
demand. Cash trade has been soft with packers easily securing needs. Hog production
margins are still solid in the near term with the cutout levels maintaining the packer
margins as well helping to stoke ideas about further expansion in numbers. Carcass weights
remain well over year ago levels with the potential for renewed PEDv problems but are
slipping from the summer highs. The December chart support is the summer low at $86.80
after trade broke below the 200-day moving average at $91.55 at the end of last week.
Seasonal action is typically a bit more positive going into early fall following the October
break. Herd expansion is priced-in looking through 2015, but if the numbers were
understated on the September hog and pig report then next spring summer prices could still
be overvalued by $5-$10. Hedgers call with questions.
FUND POSITIONS
Corn
Beans
HRW Wheat
Live Cattle
Lean Hogs
Current FuturesOne
Fund Estimate w/Options
+56 k
+182 k
+33 k
+164 k
+83 k
CFTC with options 10/14
+162 k
-12 k
+1 k
+128 k
+87 k
Copyright 1998-2014, David Fiala. Reproduction of this document is strictly prohibited without permission of David Fiala. Opinions
subject to change without notice, anyone must fully understand the risk of loss and margin required before utilizing futures and
futures options. This can be considered a solicitation.
Weather.
The harvest should progress normally with more open weather. South America has more
rain forecast.
Copyright 1998-2014, David Fiala. Reproduction of this document is strictly prohibited without permission of David Fiala. Opinions
subject to change without notice, anyone must fully understand the risk of loss and margin required before utilizing futures and
futures options. This can be considered a solicitation.
DOLLAR INDEX
The dollar has reversed back to the upside this week on better economic news.
Natural Gas
Natural Gas has bounced ahead of winter.
Crude Oil
Crude has moved lower on economic concerns.
Copyright 1998-2014, David Fiala. Reproduction of this document is strictly prohibited without permission of David Fiala. Opinions
subject to change without notice, anyone must fully understand the risk of loss and margin required before utilizing futures and
futures options. This can be considered a solicitation.