Ag Market Commentary

Corn futures are trading 3 to 4 cents lower this morning ahead of the big USDA reports at noon EDT, 11 AM Central. They ended the Friday session with front months fractionally lower with deferred contracts firm. Nearby September was up 2.69% last week, but those longs aren’t risking their gains through the report. Friday afternoon’s Commitment of Traders report indicated spec funds held a net long position of 79,507 contracts in corn futures and options. They trimmed that net position by 32,445 contracts in the week ending August 6. After the Friday close, the EPA announced they granted small refinery exemptions to 31 of the 38 refineries that applied. That will continue to undermine ethanol demand for blending. As of August 1, US total corn export commitments were 94% of the USDA projected total, with the 5-year average at 104%. Ahead of today’s USDA reports, analysts were looking for old crop world ending corn stocks to be up ~1.09 MMT to 329.84 MMT. New crop ideas are running 290.09 MMT, which would be an 8.93 MMT drop from the July report on an assumed decline in the US crop estimate.

--provided by Brugler Marketing & Management

Soybean futures are mostly 4 to 7 cents lower this morning. They posted 8 to 9 cent gains in the front months on Friday, as Sep was up 2.72% on the week. August soybean meal was up $1.90/ton, with soy oil 55 points higher. The soybean oil rose 4.45% for the week after China eliminated TRQ’s on key vegetable oil imports. Money managers added another 19,241 contracts to their CFTC net short position in soybean futures and options by August 6. That took the bearish net position to the largest since early June at -72,813 contracts. They were buying back some of those shorts late in the week. As of August 1, US total soybean export commitments were 106 % of the USDA projected total, with the 5-year average at 104%. Accumulated exports from the Export Sales report are 91% of USDA’s current projection vs. the normal 95% pace. Trade estimates for Monday’s WASDE report on average have world old crop ending stocks for soybeans at 112.98 MMT and new crop at 104.53 MMT.

--provided by Brugler Marketing & Management

Wheat futures are 2 to 4 cents lower in the Chicago and KC contracts this morning after being firm to 1 cent higher on Friday in Chicago, with HRS and HRW steady to 2 cents lower. MPLS spring wheat is hovering around UNCH this morning. MPLS was down 0.67% last week. KC was down 1.27%, with CBT up 1.78% and widening the CBT-KC spread by another 14 cents to 83 cents. The Commitment of Traders report showed specs backing off their net long position in CBT wheat futures and options to a net long 6,219 contracts. In KC wheat they added to their net short position at 20,748 contracts as of Tuesday. They also held a record net short position in MPLS wheat on that date of -17,249 contracts. As of August 1, US total wheat export commitments are 36 % of the USDA projected total, with the 5-year average at 41%. Pre-report surveys show ideas that USDA world stocks for old crop wheat were be around 275.15 MMT, with new crop expected to rise to 286.46 MMT. Changes to the US balance sheet are expected to be minimal.

--provided by Brugler Marketing & Management

Live cattle futures were mostly lower on Friday, with nearby Aug a dime higher. Feeder cattle futures were down 95 cents to $1.425 on the day. The CME Feeder Cattle Index was down 20 cents on August 8 at $141.66. Wholesale boxed beef prices were mixed on Friday afternoon, tightening the Chc/Sel spread to $22.56/cwt. Choice boxes were down $0.51 at $216.37, with Select boxes up $1.44 @ $193.81. USDA estimated weekly FI cattle slaughter at 645,000 head through Saturday, 19,000 head above the previous week and 2,000 head below the same week last year. Cash trade was reported at $113 in the North, with $110 in the South. The kill could be lower this week due to the Tyson fire in KS and an indefinite shut down there. Money managers in Live Cattle futures and options trimmed their CFTC net long position by 7,218 contracts as of Tuesday to put it at 23,185 contracts.

--provided by Brugler Marketing & Management

Lean Hog futures closed mixed in most contracts on Friday, with soon to expire Aug up $1.675 and other front months lower. Oct clawed back 1.9% last week from the steep loss of the previous week. The CME Lean Hog Index was down 58 cents from the previous day on August 7 at $82.85. The USDA pork carcass cutout value was up $1.75 on Friday afternoon at $90.44, the highest value since August 2017. The national average base hog value was down another 79 cents in the Friday PM report at $70.98. Estimated weekly FI hog slaughter was 2.354 million head, up 3,000 head from the previous week and 13,000 head above the same week a year ago. CFTC data showed spec funds in lean hog futures and options had their largest net long position since early June (40,978 contracts) on August 6.

---provided by Brugler Marketing & Management

Cotton futures are trading 18 to 74 points lower ahead of this morning’s USDA crop production and supply/demand reports. They ended the Friday session with most contracts 39 to 74 points lower. Commitment of Traders data for August 6 showed spec traders in cotton futures and options held a record net short position of 47,428 contracts. Through the first few days of the new MY, cotton export commitments are 55% of the USDA export projection, vs. the 41% average. Last year at this time the 2018/19 commitments were 63% of the projected total. The Cotlook A was unchanged on August 8 at 70.30 cents/lb. The weekly AWP is 52.67 cents/lb, down 4.29 cents from the previous week. Loan rate is 52 cents, below which cotton is eligible for LDP and MLG payments and offer arbitrage opportunities to producers. --provided by Brugler Marketing & Management

Market Commentary provided by:

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