HTS Commodities

The choice-select spread.....remains interesting. Continue to wonder if the select beef programs (like Texas Roadhouse with possibly LongHorn and Outback) along with tray pack at the retail level are bidding select beef higher into the holidays as #cattle grade choice.

And the seasonal decline of the choice cutout value is right on schedule. Rib values remain at record levels and the chuck value is hanging tough but the rest of the primals are below 2025 levels. Packer margins are at breakeven thanks to soft cash #cattle prices

Estimated CME Feeder #cattle index for 11/10 -$2.32 @ $330.53 = DUMPER!!! Every major auction on Monday was lower but Joplin and OKC were sharply lower from the previous week. CME Index is down $17.61/cwt in November. DUMPER!!

Today's CPI saw prices during October came in hot. Energy prices were higher, electricity prices climbed by 1%, rent, food.....the list goes on. Probability of a 25bps rate increase at the December Fed meeting is 100%.

November feeder #cattle basis is at the top of the 5 year range but is coming back to the historical averages. The CME cash index is in a complete free fall and has lost approx $13.30cwt since November 1.

Tyson adding a second shift to the Amarillo plant during the summer of 2027. Hopefully more USDA cash #cattle information will come.

Bloomberg's #cotton estimates for the November WASDE on 11/10. Analysts forecasting minor declines in US production and ending stocks.

Bloomberg's #corn #soybeans and #wheat ending stocks estimates for the November WASDE on 11/10. Analysts forecasting another BIG soy ending stocks, 332 mbu, corn relatively UNCH at 1.846 bbu and wheat UNCH at 744 mbu.

Bloomberg's #corn and #soybeans production estimates for the November WASDE on 11/10....BIG expectations for a record soy yield..the mean estimate = 53.5 bpa (+.4 MoM). Survey shows a modest decline in corn, 180.6 bpa (-.6 bpa). We forecast soy @ 53.6 bpa and corn @ 182.2 bpa

Ground piles of #corn in Hinton, IA. Big corn and #soybeans yields. Regional corn producers discussing <220+ bpa corn and 70 bpa soy. The Siouxland region was supposed to a major weak point for El Niño drought inflicted corn and soy yields. Obviously not the case.

Estimated CME Feeder #cattle index for 11/4 -$2.20 @$346.58/cwt. The estimated $346.58 is just down from the 2 month high of $351.66 Compared to the previous week, all auctions traded lower yesterday.

Big potential for US #soybeans yields in the November WASDE. StoneX is at 55 bpa, we estimate 53.6 bpa USDA @ 53.1 bpa. BUT...#corn yields are the big story. StoneX at a 183.1 bpa we're forecasting 181.7 and USDA is 181.2 bpa. Rain certainly helping to make grain in the US

Watching the choice cutout is more exciting than watching election results. The rib is literally holding the entire cutout together. #cattle prices falling is a positive for packing margins but beef feels vulnerable rather than strong headed into thanksgiving.

The managed money #soybeans short position is just above the bottom of the 5 year range and is all about hope. Hope that China will buy more than 25 mmt of soybeans. Hope that El Nino will reduce Brazil's soy production and hope that US yields will decline.

Estimated CME Feeder #cattle index for 11/3 -$1.53 @ $348.93 on 2,713 head. All auctions were lower yesterday.

Estimated CME Feeder #cattle index for 11/2 -$.81 @ $350.45/cwt. Big down week for Texas direct as data shows higher volume on lower price.

The equity markets are simply questioning how the hundreds of billions of dollars being spent by the hyperscalers will impact balance sheets, free cash flow, and above all the ability to generate sustainable increases in profits/earnings. Negative earnings are so 1998.

Rough week for tech stocks. Free cash flow at the hyperscalers is negative as heavy AI infrastructure spending continues. They used to be asset light, cash flow heavy with reliable growth. Now they’re asset heavy, with negative cash flow and that reliable growth is questionable

University students holding irrelevant rallies is nothing new. Students rallying outside the CME wanting to overturn the banned onion futures contract defines irrelevant. BUT the protest highlights how prediction markets represent an interesting and developing alternative

Lori Logan, Fed President of Dallas Fed, said today “It remains clear to me, given the current outlook, that the FOMC needs to implement at least two more 25 basis point rate increases” Fed hikes = US dollar strength vs the Brazilian real = headwinds US ag futures & exports