Ag Market Commentary

Corn futures settled 4 1/4 to 5 1/4 cents lower on Friday after being up on Thursday. While US weather forecasts are still juicy, a window of drier weather will allow some planting progress. A Bloomberg survey found the average analyst estimate for 2019/20 corn ending stocks in the June 11 report dropping to 1.772 billion bushels from the May USDA figure of 2.485 billion. The average trade estimate has US average corn yield dropping to 172.4 bpa from 176 in the May WASDE report. The weekly CFTC Commitment of Traders report showed the large managed money spec funds had flipped to a net long position of 87243 contracts on Tuesday, June 4. That was a swing of 107,979 contracts in a week from the previous net short.

JUL 19 Corn closed at $4.15 3/4, down 4 3/4 cents,

SEP 19 Corn closed at $4.24 1/4, down 5 1/4 cents,

DEC 19 Corn closed at $4.33 3/4, down 4 3/4 cents

MAR 20 Corn closed at $4.42 1/2, down 4 1/4 cents

--provided by Brugler Marketing & Management

Soybean futures were mostly 9 to 12 cents lower on Friday. Soymeal was down $3.60/ton, with bean oil 38 points lower in the nearby contract. USDA reported 110,000 MT of soybeans sold to Egypt under the daily reporting system, spread across both the current and next year shipping slots. China’s President Xi described President Trump as his friend and suggested that multi-lateral trade is still desirable. Per the Commitment of Traders report, the large spec funds were still net short -93356 contracts of futures and options on June 4. That reflected net buying of 36,638 contracts for the week in the CFTC reporting period.

JUL 19 Soybeans closed at $8.56 1/4, down 12 1/2 cents,

AUG 19 Soybeans closed at $8.63, down 12 1/4 cents,

SEP 19 Soybeans closed at $8.70, down 12 1/4 cents,

NOV 19 Soybeans closed at $8.83, down 12 1/4 cents,

JUL 19 Soybean Meal closed at $312.30, down $3.60,

JUL 19 Soybean Oil closed at $27.38, down $0.38

--provided by Brugler Marketing & Management

Wheat futures were mixed today, with Chicago 2 1/2 to 5 1/2 cents lower and MPLS 1 3/4 lower to 3 3/4 higher. KC HRW was down 4 3/4 to 6 1/2 cents. The nearby CBT-KC spread closed at the largest CBT premium on record at 55 1/2 cents. The milling value of HRW might be higher than SRW under normal circumstances, but these are not normal. KC protein is likely to be lower in a wet, high production year, and there is a major imbalance in stocks/use ratios between the two classes. This is not to advocate for the spread widening, but the there is a trade axiom which states “Markets can remain illogical longer than you can remain solvent”. The US ag attache raised the unofficial Russian production number from 77 MMT to 79 MMT. That is still below some of the private estimates. The Commitment of Traders report showed the funds further trimming their short position in Chicago, taking it down 10,432 in the week ending June 4 to -13,348.

JUL 19 CBOT Wheat closed at $5.04 1/2, down 5 1/2 cents,

JUL 19 KCBT Wheat closed at $4.49, down 6 1/4 cents,

JUL 19 MGEX Wheat closed at $5.68 3/4, up 3 3/4 cents

--provided by Brugler Marketing & Management

Live cattle futures settled 67 to 150 lower to finish the week. June options expired, with exercise avoidance driving some of the trade. Feeder cattle futures were triple digits lower, down $2.02 to $2.75. The CME feeder cattle index was up 11 cents to $131.84 on June 6. Wholesale boxed beef prices were mixed. Choice boxes were up 6 cents at $222.31 with Select boxes 24 cents lower @ $206.92. Both were down 0.4% for the week. USDA estimated weekly FI cattle slaughter @ 662,000 head. That is 1,000 head larger than the same week last year. The Census export data for April was released, showing US beef exports of 80,856 metric tonnes. That was 3% smaller than April 2018. The great unwind continues. CFTC shows the managed money spec funds were net long 47,842 contracts as of June 4. That was down 17,637 for the week, and the smallest net long for that reporting group since last July.

JUN 19 Cattle closed at $106.925, down $0.675,

AUG 19 Cattle closed at $103.300, down $1.500,

OCT 19 Cattle closed at $104.500, down $1.250,

AUG 19 Feeder Cattle closed at $137.250, down $2.025

SEP 19 Feeder Cattle closed at $137.350, down $2.250

OCT 19 Feeder Cattle closed at $137.375, down $2.375

--provided by Brugler Marketing & Management

Lean Hog futures were sharply lower, anywhere from $0.72 in nearby and soon to expire June to limit down in July and August. The CME Lean Hog Index was down 11 cents from the previous day @ $80.56 on June 5. The USDA pork carcass cutout value was down 17 cents today at $83.08. The national average base hog was UNCH at $75.63 despite lower prices in the WCB. Estimated weekly FI hog slaughter was 2.417 million including a Saturday run of 51,000. The weekly total would be 149,000 head more than the same week last year. Official April pork exports from Census showed 176,941 MT shipped out in April. That was down 4.1% from April 2018, with prices rising sharply in March and April. China shipments were up 16.4%, but actually smaller than suggested by the weekly FAS export sales numbers.

JUN 19 Hogs closed at $78.650, down $0.725,

JUL 19 Hogs closed at $83.350, down $3.000

AUG 19 Hogs closed at $82.625, down $3.000

--provided by Brugler Marketing & Management

Cotton futures closed 89 to 247 points lower. The stock market was higher for the 5th day in a row on expectations for a Fed rate cut. The equity rally is sucking hot money away from commodities, even though stronger equities typically suggest better demand for retail goods. The Cotlook A index for June 5 was down 25 points from the previous day to 79.60 cents/lb. The Forward A was 50 points lower at 76.85. The weekly Average World Price (AWP) from USDA is now 61.51 cents/lb through next Thursday. The Commitment of Traders report showed that the large spec funds reduced their net short in cotton by 7,399 contracts in the week ending June 4. That put them net short -27,805 contracts.

JUL 19 Cotton closed at 66.12, down 247 points,

OCT 19 Cotton closed at 65.8, down 161 points

DEC 19 Cotton closed at 65.7, down 97 points

MAR 20 Cotton closed at 66.34, down 89 points

--provided by Brugler Marketing & Management

Market Commentary provided by:

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Phone: 402-697-3623
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