Ag Market Commentary

Corn is trading fractionally higher ahead of this morning’s WASDE report release. Prices were 1 1/4 to 3 cents higher yesterday despite a 4 cent per bushel retreat in the afternoon. Ahead of the monthly USDA reports, traders estimate on average a 954 mbu cut to 2020/21 production driven by the June 30 acreage cuts. Old crop carryout is estimated to increase 169 mbu to 2.272 bbu. NMY corn stocks, on the other hand, are estimated at 2.731, which would be down 592 mbu from the previous forecast. The average pre-report estimate for world carryout is 325 MMT, that would be down 12.5 from June if realized. In the weekly Export Sales report, corn export bookings were 599,242 MT (23.6 mbu), with new crop sales of 409,345 MT (16.1 mbu).

--- provided by Brugler Marketing & Management



Soybean futures around 2 cents per bushel higher this morning, awaiting the supply and demand updates from USDA. On Thursday, soybean futures ceded 3 to 5 cents in the afternoon session, but still closed the day up by 3 1/2 to 4 1/2 cents. Soymeal futures had gains of $3.50 to $3.60/ton. Soy oil futures ended the day down by 26 points. Old crop export sales from the week ending July 2 exceeded estimates as 34.99 mbu were booked. The average pre-report estimate for new crop soy production is for a 29.3 mbu increase to 4.154 bbu. Analysts expect the old crop carry out will be UNCH, with an average estimate of 585.6 mbu. New crop ending stocks, on the other hand, are expected to increase 28.9 mbu to 423.9. Ahead of the official estimate, traders anticipate USDA raising World bean stocks by 400k MT to 96.7 MMT. Yesterday’s Export Sales report showed new crop bean sales were 14.04 mbu. Accumulated new crop bookings are at 49 mbu, which is 181% above new crop bookings from the same week last MY, and 81% of the total fwd sales coming into the 2019/20 MY.

--- provided by Brugler Marketing & Management



The three U.S. wheat markets were mostly higher on Thursday, and are trading 2 cents either side of UNCH this morning. KC HRW is the weakest. SRW wheat was up the most yesterday with gains of 7 1/4 to 8 3/4 cents in the front months. HRW wheat was UNCH in July and Sept, but the deferred contracts were fractionally higher. HRS wheat futures closed the day with 1 1/2 to 2 3/4 cent gains. Traders estimate USDA will increase 19/20 world ending stocks 1.5 MMT to 297.3 MMT later this morning. U.S. ending stocks for 2020/21 are estimated at 950.2 mbu, that would be up 25 mbu from June if realized. Traders also anticipate USDA to show a 33.3 mbu cut to wheat production. That comes from a 10 mbu cut to HRW and a 14 mbu cut to spring wheat production. USDA’s weekly Export Sales report showed 326,140 MT of wheat sales, down 22% wk/wk but 15% above the same week last year. SRW wheat was the top seller with 46% of the total. --- provided by Brugler Marketing & Management



After flashing triple digit gains at midday, cattle futures settled back for gains of $0.10 to $0.77. Feeder cattle futures also ceded some midday gains, but still closed 35 to 50 cents higher on the day. The CME Feeder Cattle index for July 8 was $133.69, up by $3.54. USDA reported some limited Thursday cash sales. Trades went $96 to $97 for live basis and $155 to $160 for dressed. From USDA’s weekly Export Sales report, 9,486 MT of beef was sold on the week ending July 2. That was an 8-week low and 56% below the same week last year. Of the week’s sales, 10.5% were to China, but Japan and South Korea were the top purchasers. Wholesale boxed beef prices were lower again on Thursday, widening the Chc/Sel spread to $8.76. Choice boxes were down 24 cents, and Select boxes dropped 69 cents. The week’s cattle slaughter is 474,000 head through Thursday. That trails last week by 10,000 head and is 2k head below the same week last year.

--- provided by Brugler Marketing & Management



Hogs were up by as much as $2.27 at the closing bell on Thursday. August was up the most. The CME Lean Hog index for July 7 was 55 cents lower to $45.35. The National Average Afternoon Base Hog price was back above $30 after a $1.09 increase, at $30.02. The WCB wtd average price was $30.44 this afternoon. USDA reported 31,474 MT of export pork was sold on the week ending July 2. That was down 20% wk/wk but 180% above the same week last year. The weekly report also mentioned 33,532 MT of pork was shipped on the same week, which pushed accumulated shipments to over 1 MMT. The 2019 record export year took until October 10th to breach the 1 MMT threshold. Through July 2, China accounts for 41% of all pork shipped. Last year, they accounted for 23%. USDA’s National Pork Carcass Cutout Value fell by 4 cents to $67.12. The afternoon primals were mixed. USDA’s estimate for WTD FI hog slaughter through Thursday is 1.857 head. That compares to 1.867m head last week and 1.902 million from the same week a year ago.

--- provided by Brugler Marketing & Management



Cotton trading overnight resulted in 51 to 73 point declines from the Thursday close. At the Thursday closing bell, cotton futures prices were down by 20 to 23 points. Old crop cotton bookings from the Export Sales report were 43,772 RBs on the week ending July 2. That was down 35% wk/wk and 18% below the same week last year. Total commitments through July 2 (17.03m RBs) are still 11% above last year and the highest since the 2005/06 MY. Old crop sales to China accounted for 50.2% of the total. The Seam reported 4,054 bales sold at an average gross price of 59.26 cents/lb. WTD sales on The Seam were 7,767 bales at a wtd av price of 60.07 c/lb. The July 7 Cotlook A index was down 25 points lower to 69.45 c/lb. The AWP for cotton for this week is up 135 points to 51.48 cents/lb. The week’s LDP is now down to 0.52 cents.

--- provided by Brugler Marketing & Management






Market Commentary provided by:

Brugler Marketing & Management LLC
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