Ag Market Commentary
Brugler Marketing and Management, LLC - BRUG - Wed Jul 11, 7:29AM CDT

Corn futures are currently 3 cents per bushel lower after posting 5 to 6 1/4 cent losses in most contracts on Tuesday. December posted a new contract low at $3.57. The USDA reported a private export sale of 113,000 MT of corn to Egypt for 2017/18 (60,000 MT) and 2018/19 (53,000 MT). They also reported a cancellation of 152,000 MT of 2017/18 sorghum to Mexico. The average trade guess for old crop US corn stocks in Thursday’s USDA S&D report is for a 13 mbu jump to 2.115 bbu. New crop US stocks are also seen higher, mainly from the increase to acreage in June 29’s Acreage report. CONAB updated their 17/18 Brazil corn production numbers with a 2.21 MMT reduction to the second crop (now 56.01 MMT), with the total crop down 2.08 MMT to 82.92 MMT. Analysts are expecting Thursday’s USDA report to show 83.2 MMT for Brazil, with Argentina at 32.7 MMT.

Soybean futures are 13 to 14 cents lower this morning after the Administration announced they will begin the process of implementing 10% tariffs on another $200 billion in imported Chinese goods. Beans closed the Tuesday session with most nearby contracts steady to fractionally mixed, supported by meal. Nearby soy meal was $2.60/ton higher, with soy oil 14 points in the green. The 7-day QPF shows forecasts for rain concentrated throughout most of NE, IA, and MN into the beginning of next week, with some of the ECB catching moisture as well. Old crop US soybean stocks are expected on average to see little change in Thursday’s USDA report, with the trade guess at 507 mbu. New crop is seen at 471 mbu, nearly 86 mbu above June on more acreage. The USDA is expected to factor in adjustments from the US-China trade dispute in that report. Tuesday morning’s CONAB report put Brazilian soybean production at 118.88 MMT, up 830,000 MT from the previous estimate. That is on par with most estimates of 118.9 MMT ahead of Thursday’s WASDE, with Argentina seen at 36.7 MMT.

Wheat futures are trading 4 to 7 cents lower at the moment. They ended the Tuesday session with most KC and MPLS contracts 8 to 11 1/4 cents lower, while the CBT was down 15 to 16 cents. The average trade estimate for the July Crop Production report is for all wheat production at 1.86 bbu, 33 mbu larger than June’s projection. Most of that increase is expected from Spring wheat production on the larger acreage number. Old crop ending stocks should be equal to June 1 stocks of 1.1 billion bushels, with analysts expecting 18/19 US stocks at 985 mbu, up 39 mbu from last month. Japan is seeking only 62,865 MT of US and Australian wheat in their weekly MOA tender, with 28,530 MT US specific. Egypt’s GASC purchased 175,000 MT of Russian when in their tender on Tuesday. Russia’s SovEcon cut their domestic wheat production estimate 2.9 MMT to 69.6 MMT.

Live cattle futures saw most contracts 67.5 to 80 cents lower on Tuesday. Feeder cattle futures were up 27.5 to 42.5 cents with the front months helped by losses in corn. The CME feeder cattle index was up 27 cents from the previous day at $146.75 on 7/9. Wholesale boxed beef values were mixed on Tuesday afternoon. Choice boxes were up 40 cents to $207.32, while Select boxes were 23 cents lower at $198.39. USDA estimated FI cattle slaughter through Tuesday at 239,000 head, 3,000 head more than last week and up 2,000 the same week last year. Today’s FCE online auction has a total of 250 head offered.

Lean hog futures posted sharp losses in most contracts on Tuesday, with August down the limit. July was down just 72.5 cents as it tries to stay close to cash ahead of next Monday’s expiration. The CME Lean Hog Index was down 19 cents on July 6, to $81.91. The USDA pork carcass cutout value was down $1.29 on Tuesday afternoon at $84.10. The butt was the only primal cut reported higher, up just 4 cents. The national base carcass price was down 8 cents from the previous day, reported at $76.36. USDA estimated FI hog slaughter at 901,000 head through Tuesday, down 25,000 head from last week but 24,000 head above last year.

Cotton futures are trading 118 to 169 points lower this morning. They ended Tuesday with most contracts 66 to 92 points higher, with the help of deteriorating crop conditions as reported on Monday. Late Tuesday afternoon a Bloomberg report stated that President Trump was preparing to release proposed tariffs on an additional $200 billion in Chinese goods. Monday’s Crop Progress report showed that 51% of the Texas crop was squared as of Sunday, with 18 setting bolls, both ahead of normal. Condition ratings in TX were down 14 points to 268, with the overall ratings at 313. The Cotlook A index was up 250 points from the previous day on July 9 to 94.60 cents/lb. The weekly USDA AWP is 74.59 cents/lb through Thursday.

Market Commentary provided by:

Brugler Marketing & Management LLC
1908 N. 203rd St.Omaha, NE 68022
Phone: 402-697-3623
Fax: 402-289-2353

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