8.28.26 Tredas Weekly Recap

Weekly Action:

Sep26 Corn up 28.25 to $5.12

Sep26 Chi Wheat up 85.5 to $7.67

Sep26 KC Wheat up 71.5 to $8.2775

Oct26 Cotton up 285 points to $0.8992/lb

Oct26 Hogs unchanged at $80.875

Aug26 Fats unchanged at $223.05

Aug26 Feeders unchanged at $334.75

Dec26 Corn up 28 to $5.365

Nov26 Beans up 48.5 to $12.88

Jul27 Chi Wheat up 70 to $7.9225

Jul27 KC Wheat up 59.75 to $8.4575

Dec26 Cotton up 303 points to $0.9138/lb

Grains:

The grain and oilseeds continue to surge higher, led again by the wheat complex as the squeeze in supply from the Black Sea and concerns of further escalation are in focus. China has been consistently popping up in the export sale notices and showed up again Friday, along with unexpected soymeal sales to Germany and the Netherlands that helped to lift soybeans to a strong close on Friday.

Funds have been massive buyers of corn, beans and wheat in the last 30 days.  Below is a history of the Corn fund position (white line) and nearby futures (blue line) going back to 2007.  Fund length has a direct correlation to price action and previously they’ve proven they’ll hold an overall long position for years at a time, with 2008-2012 and 2020-2023 being prime examples.  It’s not clear if we’re in one of those environments, but it appears there are multiple surrounding factors that could support it (Russia/Ukraine war, US/Iran war, European drought and a drastic slips in domestic and global ending stocks).  

Livestock:

Livestock ended the week mixed with cattle softer Friday after a good day Thursday, while hogs showed a hint of life to close out the week. The 5-area daily weighted average sits just above 220, which is $4-$5 lower than last week. Below are charts for the 5-area 5-week cash trend in cattle and the National 5-week cash trend in hogs.

Included are seasonal charts for feeder cattle, live cattle, and hogs. These charts will reflect the current year, 3-year avg pattern, and the 5-year avg pattern.

Weather:

Economy:

As expected, new Fed Chair Kevin Warsh delivered notably hawkish comments from Jackson Hole this morning, subsequently driving renewed volatility in market rate expectations. CME’s FedWatch now shows odds shifting to favor a 25-basis point rate hike at the Fed’s September meeting, sitting at roughly 60% at the time of writing. This is a sharp reversal in course from where we sat just 24 hours ago, with the market showing odds of holding steady that were roughly double that of a hike.a

Something That Probably Means Nothing:

39% of surveyed employees suspect their manager/boss is an extraterrestrial.

Quote of the Week:

Do not wait for the perfect moment, take the moment and make it perfect – Unknown

Have a great weekend!