Ag Market Commentary

Corn futures are on both sides of UNCH this morning. They posted sharp 7 to 12 1/2 cent gains in most contracts on Tuesday. The monthly WASDE report had a 100 mbu jump in old crop US carryout at 2.195 bbu, mainly due to a reduction in exports. To the surprise of some, USDA slashed their 2019 US corn production number by 1.350 billion to 13.680 bbu. That was driven by a 10 bpa drop to projected yield at 166 bpa, with planted acreage down 3 million acres to 89.8 million. That caused 19/20 ending stocks to drop 810 mbu to 1.675 bbu. On the world side, USDA bumped Brazilian 2018/19 corn production another 1 MMT to 101 MMT, while CONAB increased their number by 1.76 to 97.01 MMT. USDA’s old crop world stocks projection was down just 0.56 to 325.38 MMT, while new crop plunged 24.19 MMT to 290.52 MMT. About 85% of the world reduction was because of the US cut.

--provided by Brugler Marketing & Management



Soybean futures are hovering near UNCH this morning after fractional to 2 cent gains in most contracts Tuesday. Soymeal was up $1/ton, with bean oil 16 points lower. USDA cut projected old crop exports by 75 mbu and raised US carryout to 1.07 billion bushels. That resulted in the same jump in 2019/20 ending stocks at 1.045 bbu, as USDA left the rest of the 19/20 S&D table alone. The WAOB left the Brazil and Argentine production estimates at 117 MMT and 56 MMT respectively, while CONAB showed Brazil at 114.84 MMT, a 0.54 MMT increase from last month. USDA world soybean ending stocks were trimmed by 0.38 to 112.80 MMT for 18/19, with new crop also down 0.43 to 112.66 MMT.

--provided by Brugler Marketing & Management



Wheat futures are steady to 2 1/2 cents higher this morning, with Chicago the bull leader and MPLS spring wheat trailing. They ended the Tuesday session with most MPLS contracts firm to 3 cents higher, and winter wheat contracts up 3 to 10 1/2 cents led by CBT. Strength in corn was supportive, as the KC wheat-corn spread has narrowed to 29 3/4 cents. The CBT-KC wheat spread is now at a huge 60 1/2 cent premium to SRW. The monthly S&D update from USDA showed old crop wheat ending stocks for US down 25 mbu to 1.102 bbu, on an increase to exports. USDA also added 6 mbu to the 2019 US wheat production number at 1.903 billion bushels. Lower carryover and a 50 mbu jump in feed and residual caused 2019/20 carryout to drop 69 mbu to 1.072 bbu. On the world side, USDA raised old crop carryout by 1.59 to 276.57 MMT, as projected Russian exports were cut 1 MMT. New crop world stocks were up 1.33 MMT to 294.34 MMT.

--provided by Brugler Marketing & Management



Live cattle futures closed 50 cents to $1.025 higher yesterday. Feeder cattle futures were down 22.5 cents to $1.70 with pressure from double digit gains in corn. The CME feeder cattle index was up 65 cents to $132.91 on June 10. Wholesale boxed beef prices were mixed on Tuesday afternoon. Choice boxes were up 73 cents at $222.39 with Select boxes 54 cents lower @ $208.25. USDA estimated week to date FI cattle slaughter @ 243,000 head. That is 7,000 head larger than the same point last year and up 2,000 from last week. USDA trimmed projected 2019 beef production by 65 million pounds to 22.204 billion, with the reduction mainly in the fourth quarter.

--provided by Brugler Marketing & Management



Lean Hog futures settled with $1.375 to $2.95 losses on Tuesday, with soon to expire June down 20 cents. The CME Lean Hog Index was down 35 cents from the previous day @ $79.95 on June 7. The USDA pork carcass cutout value was down 30 cents on Tuesday afternoon at $83.76. Pork bellies have yet to show any signs of a typical BLT season rally. The national average base hog was up 60 cents at $75.30 per hundred pounds. This week’s estimated FI hog slaughter through Tuesday was 949,000 head. That is 5,000 head above last week and 58,000 head larger than the same week last year. On Tuesday, USDA trimmed likely 2019 pork production by 35 million pounds to 27.288 billion with the main reduction in the second and third quarters. They also increased expected 2019 pork exports by 220 million pounds to 6.466 billion.

--provided by Brugler Marketing & Management



Cotton futures are trading 18 to 52 points higher this morning. They were down 34 to 53 points in the front months on Tuesday. The monthly S&D report showed no changes to the US cotton table, with old crop carryout left at 4.65 million bales and new crop at 6.4 million bales. For the world numbers, USDA raise old crop leftover stocks by 1.06 million bales to 77.53, with New crop stocks up 1.57 at 77.26 million bales. USDA raised old crop Chinese imports by 250,000 bales but cut consumption by 500,000 bales to 40 million. The Cotlook A index for June 10 was down 300 points from the previous day to 76.35 cents/lb. The weekly Average World Price (AWP) from USDA is now 61.51 cents/lb through Thursday.

--provided by Brugler Marketing & Management






Market Commentary provided by:

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