Ag Market Commentary

Corn has gone into fast market conditions, down 4 1/2 to 10 cents or more in response to the USDA updates. USDA announced a huge 1.365 MMT corn sale to China this morning. Delivery for the private sale is split 56% old crop and 44% 2020/21. That had been rumored a week ago, and while not traded as bullish then we are seeing some “sell the fact” action. USDA’s corn production forecast is 15 billion bushels, down 995 mbu from June due to acreage cuts. Trade was looking for a 954 mbu cut. On the World stage, USDA cut new crop production 25.27 MMT to 1,163 MMT, but it was entirely from U.S. Domestic old crop carryout increased 145 mbu to 2.248, which was a smaller than anticipated increase. The 2020/21 corn stocks were dropped by a larger amount than anticipated, with USDA showing 2.648 bbu.

Jul 20 Corn is at $3.46 3/4, down 4 1/2 cents,

Sep 20 Corn is at $3.42 1/2, down 6 1/4 cents,

Dec 20 Corn is at $3.50 1/4, down 6 3/4 cents,

Mar 21 Corn is at $3.60, down 6 3/4 cents,

--- provided by Brugler Marketing & Management



In the immediate response to the new supply and demand numbers, soybean futures are down by 3 1/2 to 4 1/4 cents. Soymeal futures are down by $2.10/ton. Soy oil futures are trading 3 points higher at midday. USDA estimates soybean production at 4.135 bbu, which was a smaller than expected increase. Shifting residual use from 4 mbu to a negative 46 mbu, 2019/20 carryout was up to 620 mbu. New crop ending stocks were also up by more than expected, with a 30 mbu bump to 425. USDA raised old crop World bean stocks by 480k MT to 99.7 MMT, and lowered New crop by 1.26 MMT to 95.08. Brazilian old crop bean production was hiked to 126 MMT, larger than any of the published pre-report estimates.

Jul 20 Soybeans are at $8.98, down 1/4 cent,

Aug 20 Soybeans are at $8.92 3/4, down 3 3/4 cents,

Sep 20 Soybeans are at $8.91 3/4, down 3 1/2 cents,

Nov 20 Soybeans are at $8.97 1/4, down 4 1/4 cents,

Aug 20 Soybean Meal is at $295.20, down $2.10

Aug 20 Soybean Oil is at $28.32, up $0.03

--- provided by Brugler Marketing & Management



Wheat is mixed after Chinese buying alongside of the USDA report. SRW futures are up double digits with gains of as much as 16 3/4 cents in July. HRW futures are down by 2 to 5 1/2 cents. MPLS spring wheat futures are fractionally higher at midday. USDA announced a private export sale of 190k MT HRS and 130k MT of HRW to China this morning. Wheat production numbers were bullish relative to June, and exceeded trade expectations. USDA’s July estimate for winter wheat production is 1.218 bbu, down by 48 mbu, trade was looking for an 18 mbu cut. That came via a 33 mbu cut to HRW and a 17 mbu cut for SRW production, traders were looking for 11 and 7 respectively. Spring wheat production was estimated at 550 mbu, which was above the trade average guess of 546. In total 2020/21 U.S. wheat production is forecasted at 1.824 bbu. U.S. ending stocks for 2020/21 are forecasted at 942 mbu, that is up 17 mbu from June. Globally, USDA has World wheat production at 769.31 MMT, which is 4.12 MT below the June estimate. French wheat harvest is 10% complete according to FranceAgriMer. The ministry recently estimated new crop production down 21% yr/yr.

Sep 20 CBOT Wheat is at $5.35 3/4, up 10 3/4 cents,

Sep 20 KCBT Wheat is at $4.55, down 1 3/4 cents,

Sep 20 MGEX Wheat is at $5.27 1/2, up 1 1/2 cents,

--- provided by Brugler Marketing & Management



Front month cattle futures are trading 27 to 60 cents in the black at midday. Feeder cattle futures are up by as much as 95 cents so far. The CME Feeder Cattle index for July 8 was $133.69, up by $3.54. In the monthly WASDE updates, USDA estimates 2020 beef production at 26.934b lbs. That is up from June’s 26.674. The increase was mostly to 3Q, up 105m lbs to 7.02 billion. 4Q production is estimated at 6.935 b lbs. Wholesale boxed beef prices were mixed this morning, widening the Chc/Sel spread to $10.84. Choice boxes were $1.17 higher, and Select boxes dropped by 91 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.

Aug 20 Cattle are at $99.800, up $0.550,

Oct 20 Cattle are at $104.275, up $0.350,

Dec 20 Cattle are at $108.050, up $0.600,

Aug 20 Feeder Cattle are at $135.400, up $0.875

Sep 20 Feeder Cattle are at $136.900, up $0.725

Oct 20 Feeder Cattle are at $138.075, up $0.950

--- provided by Brugler Marketing & Management



Hogs are giving back some of yesterday’s triple digit gains. At midday futures are down by 67 to $1.05. The CME Lean Hog index for July 8 was 17 cents lower to $45.18. The Chinese Dalian lean hog futures contract launched a preliminary test round of trading on Friday. The official release date for the contracts has not yet been established. The National Average Afternoon Base Hog price was $0.17 lower to $29.91. In the monthly WASDE updates, USDA estimates 2020 pork production at 28.536b lbs. That is up 770m from June’s 27.766 billion lbs. 3Q was 310 million above the June estimate and 4Q was increased 325 million lbs to 7.485 billion. USDA’s National Pork Carcass Cutout Value jumped $4.01 to $71.13. All of the primals were higher, led by hams which were $7.98 higher. 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.

Aug 20 Hogs are at $49.550, down $0.675,

Oct 20 Hogs are at $49.500, down $1.050

Dec 20 Hogs are at $51.700, down $0.900

--- provided by Brugler Marketing & Management



Report reaction trading in the front month cotton futures has prices 10 to 32 points higher at midday. USDA’s cotton production forecast is 17.5m bales. That is down 2m bales from June on lower acres and lower yields. 2020/21 yield is estimated at 820 lbs/acre, down by 5 from the previous estimate. USDA cut new crop exports by 1m bales, but stocks were still down by 1.2 million from production losses. New crop ending stocks are estimated at 6.8 m bales. The average cash price estimate went up 2 cents to 59 cents. USDA estimated global ending stocks at 102.77 m bales for 2020/21, compared to June’s forecast of 100.56 m bales. The decrease was primarily production cuts. For old crop, USDA estimates World cotton stocks at 100.92 m bales. WTD sales on The Seam were 7,767 bales at a wtd av price of 60.07 c/lb. The July 9 Cotlook A index was up by 70 points to 70.15 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.

Oct 20 Cotton is at 64.60, up 26 points

Dec 20 Cotton is at 64.12, up 23 points

May 21 Cotton is at 65.33, up 32 points

Jul 21 Cotton is at 65.56, up 12 points

--- provided by Brugler Marketing & Management






Market Commentary provided by:

Brugler Marketing & Management LLC
1908 N. 203rd St.Omaha, NE 68022
Phone: 402-697-3623
Fax: 402-289-2353
E-mail: alanb@bruglermktg.com
Web: http://bruglermarketing.com

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