Pure Hedge - Livestock and Grain

9/27/24

     The Soybeans shot higher today and had a wide 35 ¼ cent range, while the Livestock Markets were mixed. The Fats ended the day a little lower. December'24 Live Cattle was 35 cents lower today and settled at 184.47 ½. Today's high was 185.60 and that is the new 1-month high as well. Today's low was 184.30 and the 1-month low is 173.50. Since 8/27 December'24 Live Cattle are 5.75 higher or more than 3%. The Feeders made a small gain. October'24 Feeder Cattle were 15 cents higher and settled at 247.07 ½. Today's high was 248.62 ½ and that is the 1-month high as well. Today's low was 246.60 and the 1-month low is 229.57 ½. Since 8/27 October'24 Feeder Cattle are 8.97 ½ higher or more than 3%. The Hogs were down a little. December'24 Lean Hogs were 55 cents lower today and settled at 73.37 ½. Today's high was 75.07 ½ and the 1-month high is 75.80. Today's low was 72.60 and the 1-month low is 70.55. Since 8/27 December'24 Lean Hogs are 1.75 higher or almost 2 ½%. Weekly export sales yesterday were 12,500mt, down 24% from the week before, and down 14% from the last four-week average. The Cold Storage Report was released yesterday, and it showed frozen red meat supplies were down 1% from the month before and down 2% from last year. Total pounds of beef in freezers were down 2% from the previous month and fractionally lower from the year before. October'24 Feeder Cattle have closed higher for 7 straight trading sessions, up $7.12 ½ over those 7 days. The cash market has been strong, and about 2-dollars higher this week. 185 traded in Texas, and higher numbers were reported in Iowa and Nebraska. Thank you again to the Texas Gentleman who has been calling me with real time cash market bids and offers, along with the price traded. I appreciate it, and so do my Customers. 

     November'24 Soybeans were 24 ¾ cents higher today and settled at 1065 ¾. Today's high was 1069 ½ and that is the new 1-month high as well. Today's low was 1034 ¼ and the 1-month low is 972 ¾. Since 8/27 November'24 Soybeans are 79 ¼ cents higher or more than 8%. The Corn was positive as well. December'24 Corn was 4 ¾ cents higher today and settled at 418. Today's high was 419 ¾ and that is the new 1-month high as well. Today's low was 410 ¾ and the 1-month low is 388 ¾. Since 8/27 December'24 Corn is 25 ¼ cents higher or more than 6%. The Wheat was a little lower. December'24 Wheat was 4 ¼ cents lower today and settled at 580. Today's high was 583 ½ and the 1-month high is 598 ¾. Today's low was 575 ½ and the 1-month low is 533. Since 8/27 December'24 Wheat is 44 ½ cents higher or more than 8%. The Quarterly Grain Stocks Report will be released on Monday, and expectations are for stocks to be 351 million bushels, up 33% from last September's number of 264 million bushels. Argentina is planting 7% more Soybeans this year. Argentina's Beans production estimates for the year are 52 million Tonnes. The USDA's production number for Argentina is 51mt. LSEG estimates for Brazil Soybean production is 165mt, and that would be a production record, and is up 7.8% from last year. CONAB's production number for Brazilian Soybeans is 166.3mt, and the USDA's number for Brazil's Soybean production is 169mt. Apparently, the short covering has continued, and the Beans continue to rally. December'24 Soybean Meal took off today as well. December'24 Meal closed 17.30 higher today at 344.10. The 200-Day moving average for December'24 Soybean Meal is 343.90. There is also a worry about the dryness in Brazil. In Southern Brazil there have been some rains, and planting is going ahead of pace. The lack of rain is in the Nothern and Central part of the country. The monsoon rains normally arrive in early October. Today I have heard forecasts for rain in the Northern and Central parts of Brazil starting as early as October 7th. The new Tariffs on China's EV's starts today, and we will soon see what the Chinese do to retaliate. They could put large tariffs on the US agricultural sector, or just stop buy US crops. China has been stockpiling Soybeans for a while. China has purchased a record number of Soybeans, but not from the US Farmer. Last month China purchased 12.14mmt of Soybeans, and almost 84% of them were from Brazil. Soybean purchases from the US accounted for only 1.7% of China's purchases last month. From January through August, China has purchased almost 54mmt of Soybeans from Brazil. That is an increase of 217% over the same time period from last year. China purchased just 12.8mmt of Soybeans from the US Farmer, down 73% over the same time period. There is a WASDE Report next month on the 11th, just 10 trading days away. If the yield changes, or if the ending stocks change it will be a large market mover. The USDA has Soybean yield at 53.2 bushels per acre and ending stocks at 550mb. If the numbers are closer to Pro Farmers estimates of 675mb ending stocks, the Market will react quickly. If Monday's Quarterly stocks report is bigger than expected, it will most likely put a stop to this Bean rally, and if the rains arrive in Brazil, at the same time as a potential change to US Soybean production in the WASDE Report, I feel the Beans will have a 9-dollar handle again quickly. If you have any questions or would like to receive our research, just let me know. BALLEN@WALSHTRADING.COM 

-Bill

 

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Bill Allen

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