Updated: March 15th, 2019
  
Closing Prices:
DEC. 2019 CORN $3.95
NOV. 2019 SOYBEANS $ 9.42
JULY 2019 KC WHEAT $ 4.51
 
Weekly Change: Corn finished 7 higher for the week, Soybeans finished up 12,
and Wheat finished 11 higher for the week. 
 

 

 

 

We need help!

Do you know of someone looking for a career working with ag producers and a passion for the markets? If so, we’d like to hear from them.  AgWest is currently looking for a few good folks that can help service the growing demands from our farming partners.  Currently we have the below openings:

For more details and to submit an application, please click HERE.


The Story of the Week

 

Besides the Nebraska basketball team advancing through the first two rounds of the “Big 10” tournament, the biggest story this week has been in the Lean Hog market. China’s Ministry of Agriculture issued some shocking data on Thursday. They report a 16.6% drop in China’s pig herd from last year (February 2019 compared to February 2018). The February pig herd is also down 5.4% from January as the African Swine Fever continues to show up in different locations and herds. China’s sow herd is down from last February by an amazing 19.1% and down 5.0% from January. Chinese hog prices have moved to 14-month highs. It is now apparent that the African Swine Fever outbreak is NOT under control and there has been larger herd culling than previously thought.    

The USDA reported the largest sale of pork to China in two years. Given the herd reduction data released by China’s Ministry of Agriculture, further pork exports would seem logical if not inevitable. The U.S. Lean Hog futures contracts led the news with the beginning of a monster move. Given the significance of China’s herd decline, this rocket ship may barely be off the launch pad…time will tell. 

Grain Futures Stabilize

 

After an ugly trade last week, grain and oilseed futures did a nice job of stabilizing and added some value this week.  Closing in on the last hour of Friday’s trade, new crop corn sits eight cents above its recent low, new crop soybeans are 17 cents above its low, and July KC wheat is 22 cents above last Tuesday’s low. A bull market these are not, but stabilization after last week’s freefall is quite welcome!

 

Trade Talks – It’s a Grinder

 

Don’t get excited just yet. Treasury Secretary, Steven Mnuchin, said late week that a meeting between President Trump and Chinese President Xi Jinping will not happen by the end of this month. “We’re not going to do it at the end of this month given the timing because we still have more work to do,” he told reporters on Thursday afternoon. “I think if we have an agreement, the Presidents are prepared to meet.” “There’s still a lot of work to do, but we’re very comfortable with where we are. I don’t think there is anything significantly different on the currency issue from where we were the last time.” The two countries continue to glean, edit and revise a 150 page document. 

On the other hand, President Trump indicated yesterday that a deal is three to four weeks down the road. As we have said for months, until a deal is inked, there is little reason to devote much time and effort to outguessing the trade deal. It will be what it is when the time comes. It may be wonderful, or it may leave the soybean market with little enthusiasm. It is anyone’s guess and those odds don’t favor stacking positions or developing marketing plans based on a specific outcome.

 

$130 Resistance  

 

April live cattle carved out a methodical year-long uptrend that started last April with a low just above $110. We showed long-term charts at our winter “Outlooks” that indicated the $130 area could prove to be stiff resistance. The $130 area is certainly performing as advertised. Could this area give way to a larger spring rally or is recent action in the process of confirming an April top? We wish we knew that answer, but based on this being obvious overhead resistance, and add the fact that last year’s spring top (April top) landed on February 20th at $120, this certainly seems like a logical area to lay off risk. If you have fat cattle that will be ready basis the April futures, consider removing your price risk right now. Talk with your broker and develop a price risk strategy that fits your livestock enterprise. Remember these two things…

 

  • Commodity markets go up and THEN they go down.
  • A bird in the hand is worth more than two in the bush.

  Have a great week!

PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. THERE IS SUBSTANTIAL RISK OF LOSS INVOLVED IN TRADING FUTURES AND OPTIONS WHICH MAY NOT BE SUITABLE FOR EVERYONE. HOWEVER, THE RISK INVOLVED WITH PURCHASING OPTIONS IS LIMITED TO THE PREMIUM PAID PLUS TRANSACTION COSTS. THIS MATERIAL HAS BEEN PREPARED BY A SALES OR TRADING EMPLOYEE OR AGENT OF AGWEST AND IS A SOLICITATION FOR ENTERING INTO A DERIVATIVES TRANSACTION. THIS MATERIAL IS NOT A RESEARCH REPORT PREPARED BY AGWEST. IF YOU ARE NOT AN EXPERIENCED USER OF THE DERIVATIVES MARKETS, CAPABLE OF MAKING INDEPENDENT TRADING DECISIONS, THEN YOU SHOULD NOT RELY SOLELY ON THIS COMMUNICATION IN MAKING TRADING DECISIONS.