Ag Market Commentary

Corn futures are steady to 1 cent higher this morning after rising 3 to 4 cents on Thursday. Bulls got help from decent export sales data and spill over from soybeans and wheat. The weekly FAS Export Sales report indicated old crop sales on the light side of trade estimates at 338,983 MT, with new crop higher that the range of expectations at 1.045 MMT. Combined sales in the week of 8/9 were 88.48% larger than the same week last year and 14.16% larger than the week prior. Export shipments of corn 74.67% larger than the same week last year. The primary destination was Mexico at 463,100 MT, with 290,700 MT headed to Japan. China sold 1.53 MMT of corn from state reserves into the domestic market, totaling 38.43% of the amount offered.

Soybean futures are trading 1 to 3 cents lower. They closed 26 to 28 1/4 cents higher on Thursday, after China agreed to resume low level talks with the US. Preliminary open interest rose only 1043 contracts on Thursday, but there was some net new buying in the 2019 contracts. Nearby soy meal was up $5.10/ton, with soy oil 27 points higher. The weekly Export Sales report showed old crop soybean sales slowing to 133,414 MT. Those need to be shipped before August 31. New crop sales were 571,554 MT, up 7.3% from last week. Soybean exports in the week of August 9 were 586,559 MT, down sharply from the week prior and 21% lower than last year. The Inspections report on Monday had already hinted at a smaller number. Exports commitments are now lagging last year by 4.3%, slipping a little from last week. Soy meal export sales were seen at a combined total of 354,487 MT, as soy oil was just 5,124 MT.

Wheat futures are 5 to 11 cents higher this morning, with KC HRW the strongest. They saw gains of 10 to 13 cents in most contracts yesterday after getting support from positive export sales data. Export Sales data showed all wheat sales in the week that ended August 9 at a robust 803,047 MT! That was up 153.3% from last week and a MY high, as it was also 26.8% larger than this same week last year. Mexican importers purchased 247,800 MT of that, with the Philippines buying 177,900 MT. All wheat shipments were tallied at 461,604 MT. That was the largest this MY, and the highest weekly total since April. Total export commitments are now 25.5% behind last year, gaining 3% on that moving target since the previous week.

Live cattle futures settled steady to 55 cents higher on Thursday. Feeder cattle futures were steady to $1.225 higher. The CME feeder cattle index was down 5 cents from the previous day at $150.29. Wholesale boxed beef values were mixed on Thursday afternoon. Choice boxes were at $209.10 down 85 cents, while Select boxes were up that same amount at $201.46. USDA FI cattle slaughter was estimated at 474,000 head through Thursday. That is down 3,000 head from the previous week but 8,000 head above the same week in 2017. Bids of $108 were still being shown across the country on Thursday. US weekly beef export sales totaled 21,529 MT, a 47.9% jump from last week. Export shipments slipped a bit from last week at 16,992 MT, but were 8.14% larger than last year. Total export commitments for 2018 are now a phenomenal 19% larger than last year.

Lean hog futures posted limit gains in the nearby contracts on Thursday, anticipating renewed US/China trade talks later this month. The CME Lean Hog Index was down $1.58 on August 14, to $55.23. The USDA pork carcass cutout value was down 86 cents from the previous day at $67.63 on Thursday afternoon. The national base hog carcass value was down 59 cents in the Thursday PM report, with the weighted average @ $41.54. USDA estimated weekly hog slaughter at 1.859 million head through Thursday. That is up 87,000 head from last week, and 67,000 head above the same week last year. Pork export sales added up to 26,690 MT during the week of August 9, 7.3% above last week. Pork exports were 19,484 MT in that week, a jump of 43.4% from last week and 12,6% larger than last year. Full year 2018 export commitments are 6.1% above this time last year, based on FAS weekly numbers and not the more complete but lagged Census numbers.

Cotton futures are trading 25 to 50 points lower this Friday morning. They were 83 to 106 points higher in most front months on Thursday, on the potential for renewed trade dialog between the US and China. It could still be some time before we see any kind of deal. The USDA Export Sales report showed 77,718 RB in old crop upland sales in the week that ended on August 9. Vietnam purchased 24,600 RB, with Pakistan buying 16,900 RB. Upland cotton exports totaled 240,271 RB in that week, which was 19.92% larger than last year. US Export commitments for upland cotton are now 35.8% above the same week in 2017. The Cotlook A index was up 15 points from the previous day at 92.90 cents/lb on August 15. The weekly AWP was updated to 75.45 cents/lb through next Thursday, down 422 points from the previous week.

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