↑ Mar '24 |4.89 3/4 |+1 3/4
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↑ Dec '24 |5.14 1/2 |+1 1/4
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↑ Nov'24 |12.82 1/4 |+7 3/4
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↓ Mar'24
' | 6.38 1/2 |-3 3/4
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↓ Jul '24 | 6.48 3/4 |-4 1/4
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Night Trade as of 7:00 am CST.
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USDA Reports Today
The USDA releases their monthly WASDE and Crop Production reports at 11 a.m. Central. Click here to see the results later today.
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Sell Signals
- Chicago Wheat – Day 4
- Kansas City Wheat – Day 4
Buy Signals
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Soybeans – Day 8
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Meal – Day 7
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During the past 12 months
- Chicago Wheat had 5 Sell Signals lasting 5, 7, 9, 3, and 2 days.
- KC Wheat had 6 Sell Signals lasting 1, 13, 7, 7, 4, and 3 days.
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During the past 12 months
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Soybeans had 6 Buy Signals lasting 2, 7, 8, 13, 10, and 18 days.
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Meal had 13 Buy Signals lasting 7, 2, 14, 1, 1, 1, 8, 6, 7, 12, 10, 12, and 13 days.
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Winter wheat in Sell Signals
Beans and meal in Buy Signals
Crop markets were largely unchanged overnight ahead of today’s USDA report release. While few changes are expected outside of further cuts to South American production, traders seem to have stepped to the sidelines to wait for the reports.
Market action hasn’t varied much this week. Traders have had little opinion on the corn market, as prices continue to chop back and forth across the 20-day moving average. Corn flirted with an uptrend move large enough to produce a quick Sell Signal (like in wheat), but prices couldn’t build any upward momentum before collapsing back to the 20-day.
Soybeans and meal began their decline to the current lower level last week, which triggered Buy Signals along the way.
Soybean and meal prices bottomed early this week and then turned sideways. It was positive to see beans bounce off those recent lows and close higher on the day yesterday. Overnight, bean prices trended higher. Once the reports are past, we’ll see if this is a pivot point on the bean chart. Next week’s South American weather will likely influence the next move.
Soybean oil prices fell into Buy Signal territory for less than a day, only to quickly recover back to the 20-day.
The biggest movers this week have been the wheat markets, which popped higher on multiple days of flash sales notices of soft red winter wheat to China. Flash sale notices Monday, Tuesday, and Wednesday totaled 1.01 million metric tons (37.1 million bushels), however that streak ended, as no wheat sales were announced yesterday (but there were 121,000 tons of beans to Unknown announced).
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NOTE: This morning's flash sales included another 110,000 metric tons of soft red winter wheat for delivery to China (along with some soybeans and corn)
The spec funds have built their short positions across the wheat markets to historically large levels as they chased the downward trend in wheat over the past few months. When we look back at these patterns over time, it is unusual for the funds to hold extremely short positions for a long time.
At some point the trend will change and the funds will become buyers as they chase the trend back upward. Prices didn’t quite get high enough this week to create the urgency for the funds to move away from the short side of the boat. Yesterday’s lull in flash sales notices likely removed that sense of urgency.
Chicago and Kansas City wheat both remain in 1-Box Sell Signals today. There is still an opportunity to dribble out some additional sales.
Minneapolis wheat failed to give us a Sell Signal this week. Like corn, spring wheat prices flirted with higher levels before falling back towards the 20-day average. Minneapolis wheat remains a couple of days of higher prices away from a Sell Signal.
Repeating
This Sell Signal is an opportunity for producers that feel undersold or have immediate cash flow needs. We recommend going slow with sales during this round of Sell Signals. Dribble out small sales of new crop winter wheat each day of the Sell Signal.
On previous Sell Signals, we had brought our recommendations up to 30% of expected new crop. If the current prices are profitable on your farm, add another 5% split across five days of the Sell Signal if prices continue to trend higher. If prices run up to new levels due to spec fund short covering, we will be ready to make additional sales.
Outside markets
Equities: A solid showing by Nasdaq led stocks higher overall on Thursday, although the gains were generally modest with traders digging in ahead of the November Jobs report. Google’s parent company, Alphabet, announced launch plans for its new Gemini AI system to rival ChatGPT. The Dow Jones and S&P 500 also closed higher.
US Dollar: The dollar was lower against most currencies on Thursday, falling below 104 after being on an uptrend since the end of November.
Indications the bank of Japan will tighten its monetary policy helped push the yen higher against the dollar to above 147. The euro rose to 108 versus the dollar.
Treasuries: The bond market was on the quiet side Thursday while traders looked ahead to the November Jobs report. Yields were generally little changed with short-term yields drifting lower by a few basis points while the 10-year and the longer-term bonds were slightly higher. The 10-year ticked up to around 4.12% and the 30-year made it as high as 4.27% before falling off later in the day.
Traders remain convinced the Federal Reserve will leave rates unchanged next week and then start making multiple cuts in 2024. Some analysts, however, told Reuters the Fed very well could take its time lowering rates to prevent a nasty inflation rebound like the one that put a damper on the 1970s.
Energies: Crude staged a modest rally Thursday but failed to re-establish their $70 beachhead. January WTI gained about a quarter to remain above $69 after being unable to attract many buyers during a midday trip above $70. Trading volume was lighter than earlier in the week when sellers were out in force.
Analysts said Wednesday’s inventory report showed robust U.S. crude production that added to ample supplies at the same time global demand has softened. Putin’s last-minute trip to Saudi Arabia produced a statement urging OPEC+ to either “adhere” to the cartel’s planned cuts or “join” them, depending on the translation.
Metals: Gold futures were slightly lower Thursday with February contracts sticking to the week’s range around $2,045.
China saw a sharp increase in exports of metals and minerals last month, including a 42.6% jump in the rare-earth minerals and a 7.5% increase in aluminum; steel exports surged 43.3%
S&P Global said Thursday that steel exports were on track to top 90 million metric tons this year and the highest volume since 2016 and remain brisk into next year.
Livestock: Livestock futures were generally lower on Thursday with volumes holding up heading into the end of the week.
Live cattle futures fell about a dollar with February and soon-to-expire December setting 12-month lows near $162. January feeder cattle were little changed at just above $210 and a dollar or so below March. February hogs lost more than $1.50 and fell below $68 and closer to December, which held steady around $67.500.
Additional livestock fodder will be available in today’s WASDE update. Meanwhile, the USDA number crunchers will head out the door for the holidays on Dec.22 after releasing the Cattle on Feed report along with Cold Storage and Hogs & Pigs in the middle of everyone’s Friday office parties.
Live Cattle: Cash markets continued to drift around the $170-$171 range at midweek on modest volume. Beef exports were almost non-existent last week.
The beef cutout appeared wobbly as the early Thursday choice number fell nearly $2 to $288.62, which was $28 over select but noticeably lower than the 5-day average of $295.15. Analysts said the top-tier rib primal was currently solid at nearly $588, but that will likely come down once the holiday roast beef stampede winds down.
Feeder Cattle: The CME Feeder Cattle Index continued to show some strength and climbed above $224 at midweek. It is the seasonal busy time of the year for feeder cattle sales, but favorable pasture conditions could push some sales to next year, although analysts reminded the market that producers have 2023 tax ramifications to consider when making sales.
Lean Hogs: The early Thursday cutout was about a half-dollar lower at $82.63 and nearly a dollar below the 5-day average. The slaughter pace has picked up, bringing the weekly total to 1,946,000 as of Thursday compared to 1,930,000 last week and 1,956,000 at this time last year. Cash markets remained in a funk with prices in the west below $53.
The USDA’s monthly livestock summary for October featured increased exports of beef and pork. Thursday’s report said beef exports climbed to 241,488 metric tons from 231,503 MT in September.
Pork exports rose to 572,239 MT from 512,021 MT. Exports of live cattle rose to 44,844, the highest total since November 2022. On the import side, the United States brought in more than 581,000 hogs in October, primarily from Canada, compared to September imports of 521,593.
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Weekly Brazil Update video
Click the image below to watch the weekly video review of everything going on in Brazil this week. Aaron Edwards picks back up on his discussion of the status of soybean planting in Brazil and how the progress and current weather patterns are impacting the South American crop.
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Monthly Jobs report
The U.S. economy added 199,000 jobs to the nation’s payrolls in November, more than analysts had expected and bolstered by the end of strikes by Hollywood actors and thousands of autoworkers.
The solid performance brought the unemployment rate down to 3.7% in November; analysts had projected between 180,000 and 190,000 jobs and an unemployment rate of 3.9%. The October report showed 150,000 jobs added during the month and a 3.9% unemployment rate.
The Labor Department’s closely watched statistics will be part of the data package the Federal Reserve reviews ahead of their December meeting on interest rates. Friday morning’s announcement sent stocks and bond yields lower.
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Source: Bureau of Labor Statistics, tradingeconomics
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US Drought Monitor
Last week’s weather action was largely confined to the western United States, leaving the agricultural heartland in a lull that resulted in little change in drought conditions.
The U.S. Drought Monitor update Thursday looked virtually the same as last week in the Midwest and Plains states while the Pacific Northwest and Southeast saw heavier precipitation.
Drought and dryness hung on in wide areas of the upper Great Lakes and central Plains, including stubbornly dry parts of eastern Nebraska and Iowa, and much of Kansas.
The West Coast saw rain and snow that increased snow levels in the mountains and kept California clear of drought and dryness conditions, although snowpack in the higher elevations lagged the seasonal norms.
The Southeast saw some torrential downpours, but the result was some relatively minor improvements in Texas and Oklahoma while Tennessee, Louisiana and the rest of the Gulf Coast remained locked into higher levels of drought; most of the parched areas, however, were in short-term impact areas that could see noticeable improvements with a little more rain.
Those rains likely won’t be helping much in the coming week as the national pattern dries up in the south while precipitation remains largely in the West with some heavy rainfall also possible in the Carolinas.
The drought has resulted in a difficult year for Louisiana farmers. Louisiana State University recently calculated agricultural losses this year at $1.69 billion with the soybean and sugarcane crops taking the brunt with losses of $322 million for soybeans and $273 million for sugarcane.
Current Drought Monitor map
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Source: National Drought Mitigation Center, NOAA, USDA
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USDA report estimates
Later today, the USDA will release their monthly WASDE and Crop Production reports. Past values and trade estimates for key data from those reports are summarized below.
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Source: USDA, Bloomberg, StoneX
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USDA Flash Sales
From this morning's USDA daily exports sales notice
- 136,000 metric tons of soybeans for delivery to China during the 2023/2024 marketing year
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110,000 metric tons of soft red winter wheat for delivery to China during the 2023/2024 marketing year
- 165,000 metric tons of corn for delivery to unknown destinations during the 2023/2024 marketing year
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US – Wednesday's observed precipitation
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Source: NOAA
The Pacific Northwest is forecast to receive a pause in the heavy precipitation that has hammered them all week. Snow and mixed winter precipitation are possible today across much of the Mountain West and Northern Plains, while rain is expected across much of the Midwest and mid-South.
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GFS Model - U.S. 7-day precipitation forecast
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European Model - U.S. 7-day precipitation forecast
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US 15-day precipitation forecast relative to normal
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Brazil 15-day precipitation forecast relative to normal
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Argentina 15-day precipitation forecast relative to normal
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ABOUT US
Roach Ag. Marketing is a full service advisory firm founded in Perry, Iowa back in 1978 to help farmers do a better job of marketing their crops and livestock. Learn more...
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CONTACT US
Roach Ag Marketing
568 E Yamato Rd
Ste 200
Boca Raton, FL 33431
Telephone: 800.622.7628
FAX: 561-994-9240
E-mail: dailygrainplan@roachag.com
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