Ag Market Commentary
BRUG - Fri Aug 18, 7:19AM CDT
Corn futures are fractionally higher this morning. They ended Thursday with most contracts 1 to 2 1/4 cents lower. The USDA indicated 698,461 MT of corn reported for shipment for the week of August 10, well below last year (when Brazil had a drought and was out of the market). Total export commitments are 13.41% above last year, at 56.47 MMT. With just 3 weeks left in the marketing year, commitments for corn are 100% of the USDA projection, lagging the average of 104% and last year’s 107%. Thus, there is some risk of missing the estimate. On Thursday, China sold 123,811 MT of corn from 2014, with an additional 15,000 MT of 2013 corn being sold at an auction of state reserves. That was just 17.14% of the total amount offered.

Soybean futures are trading a penny higher to a penny lower this morning after posting gains of 5 1/2 to 8 1/2 cents on Thursday. Sep soy meal was up $1.50/ton, with nearby bean oil 36 points higher. In the USDA Export Sales report, shipments were up 21.3% wk/wk at 742,769 MT, but down 14.1% from last year. They are still stronger than previously expected for August. Soybean export commitments are 15.8% larger than last year for this week. They are 105% of the USDA full year export estimate, vs. 104% last year and the average of 103%. Total soy meal exports came in at 151,161 MT, with soy oil shipments of 23,523 MT.

Wheat futures are mostly 1 to 2 cents higher this morning. They finished the Thursday session with most CBT and KC contracts 2-5 1/4 cents in the red. The more volatile MPLS spring wheat contract is trading 4 to 5 cents higher this morning. MPLS was down 3 1/4 cents in nearby Sep yesterday, with deferred contracts higher. Thursday morning’s USDA Export Sales report indicated weekly wheat shipments of 545,899 MT, down 23.96% vs. last year. Export commitments for wheat exports are 0.2% behind last year at this time. Compared to the USDA export projection, they are 42% complete, even with last year and slightly behind the average pace of 44%. A Bloomberg survey shows estimated Canadian wheat production for 2017 at 26.4 MMT, compared to the USDA’s 28.35 MMT. Stats Can will report on August 31. Saudi Arabia is seeking 480,000 MT of wheat through the Saudi Grains Organization, for Oct-Dec delivery. This tender will close on Friday.

Live cattle futures fell 87.5 cent to $2.35 on Thursday, as weaker cash trade was reported. Feeder cattle futures were $1.375 to $2.40 lower. The CME feeder cattle index was 5 cents lower than the previous day at $144.44 for August 16. Wholesale beef prices were lower again in the Thursday afternoon report, with choice down $1.88 at $195.63 and select boxes 84 cents lower at $194.20. The CH/SE spread has now narrowed to only $1.43, the lowest since February 20. Cash sales of $110-$110.50 were reported across most regions yesterday, down $5 from last week. Week to date FI cattle slaughter was estimated at 467,000 head through Thursday, 2,000 fewer than last week but 14,000 larger than the same week last year. Total beef export commitments are 5.7% larger than last year.

Lean hog futures were down 65 cents to $1.85 on the day. The CME Lean Hog Index for 8/15 was 35 cents lower than the previous day at $84.03. The USDA pork carcass cutout value was 42 cents higher in the Thursday afternoon report, with a weighted average of $91.97. The national base hog carcass was down 93 cents at $75.46 in the PM report. FI hog slaughter was estimated at 1,785,000 week to date through Thursday, 72,000 head larger than the previous week and up 57,000 from the same week in 2016. Pork export commitments YTD (at least those tracked in the weekly FAS report) are 8.8% above last year at 810,758 MT.

Cotton futures are trading 5 to 30 points higher this morning after a mixed close on Thursday. The USDA Export Sales report showed 186,686 RB of 17/18 all upland cotton sales for the week of August 10. Weekly shipments of 200,354 RB were 75.82 larger wk/wk and 13.94% above last year. Upland cotton export commitments are 66.3% larger than last year at this time, @ 6.13 million RB. The USDA cotton AWP for the coming week will be 59.70, down from 62.46 cents/lb in the week just ended. China sold 27,020 MT of the 29,561 MT offered at Thursday’s auction of state reserves.

Market Commentary provided by:

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