Ag Market Commentary
Brugler Marketing and Management, LLC - BRUG - Thu Jul 12, 4:59PM CDT

Corn futures settled with 5 to 6 cent gains on Thursday. This morning’s USDA S&D report showed old crop stocks of US corn down 75 mbu from last month at 2.027 bbu, a surprise cut caused by larger export assumptions. The 2018/19 production was up 190 mbu at 14.23 bbu on larger acreage but that was partially offset by increased demand. New crop US stocks went against expectations and were trimmed 25 mbu to 1.577 bbu. Brazil production was shown at 83.5 MMT, down 1.5. That helped to drop 17/18 world ending stocks to 191.73 MMT. New crop was projected at 151.96 MMT, down 2.73 from June’s report. The weekly USDA Export Sales report showed old crop corn sales in the week of July 5 on the low end of expectations at 402,102 MT, but well above the same holiday week last year. New crop sales fell short of estimates at just 128,035 MT.

Jul 18 Corn closed at $3.36 1/2, up 5 1/4 cents,

Sep 18 Corn closed at $3.45 3/4, up 5 3/4 cents,

Dec 18 Corn closed at $3.59 1/4, up 6 cents

Mar 19 Corn closed at $3.71, up 6 cents

Soybean futures managed to squeeze out fractional to 1 cent gains on Thursday, despite mostly bearish numbers from the USDA. Most of those numbers were likely priced in ahead of the report. Nearby soy meal was up 40 cents/ton, with soy oil 16 points lower. The USDA cut 40 mbu from 17/18 US ending stocks to 465 mbu, with help from higher crush and exports. New crop stocks were raised 195 mbu to 580 mbu, as production was up 40 mbu to 4.32 bbu. Exports played the major role, down 250 mbu on assumed lost shipments to China. Crush use was increased. World ending stocks for old crop beans were up 3.53 to 96.02 MMT, with Brazil up 0.5 to 119.5 MMT and China crush down 3 MMT. New crop stocks were up 11.25 MMT to 98.27 MMT. China’s ag ministry dropped their country’s expected total import number by 1.8 to 93.85 MMT, with the USDA slashing theirs by 8 to 95 MMT. US weekly soybean old crop export sales were shy of the range of estimates at just 158,507 MT. A total of 270,840 MT were shown for new crop in this morning’s Export Sales report.

Jul 18 Soybeans closed at $8.30, up 1/4 cent,

Aug 18 Soybeans closed at $8.33 3/4, up 3/4 cent,

Sep 18 Soybeans closed at $8.39, up 1 cent,

Jan 19 Soybeans closed at $8.59, up 3/4 cent,

Jul 18 Soybean Meal closed at $333.40, up $0.40,

Jul 18 Soybean Oil closed at $28.17, down $0.16

Wheat futures saw gains in most contracts on Thursday, with CBT leading the way up 9 to 12 3/4. KC was mostly 6 to 7 1/4 cents higher and MPLS up 4-5 cents. This morning’s NASS Crop Production report indicated that all wheat production is projected at 1.881 bbu, up 53 mbu. As expected the majority of the jump was from spring wheat, at 613.97 mbu. All winter wheat production was down 6 at 1.192 mbu, with HRW up 7 mbu and SRW down 12 mbu. New crop US stocks were shown at 985 mbu, on par with estimates, and a 39 mbu jump from the previous estimate. World ending stocks were shown at 273.5 MMT for old crop, while new crop was down 5.28 to 260.88 MMT. A reduction to European countries helped, as Russia is now at 67 MMT and the EU down 5.4 to 145 MMT. Strategie Grains cut their EU production estimate 7.5 MMT to 132.4 MMT. All wheat export sales for 18/19 in the week that ended July 5 were just 136,408 MT, short of analysts’ expectations.

Jul 18 CBOT Wheat closed at $4.82 1/2, up 12 3/4 cents,

Jul 18 KCBT Wheat closed at $4.70 1/4, up 7 1/4 cents,

Jul 18 MGEX Wheat closed at $5.23 3/4, up 4 cents

Live cattle futures posted 60 cent to $1.35 gains on Thursday. Feeder cattle futures were steady in the back months to $1.625 higher in the nearby contracts. The CME feeder cattle index was up $2.08 from the previous day at $147.16 on 7/11. Wholesale boxed beef values were lower on Thursday afternoon. Choice boxes were down 86 cents to $206.58, while Select boxes were 13 cents lower at $197.01. USDA estimated FI cattle slaughter through Thursday at 479,000 head, up 8,000 the same week last year. Cash bids of $108 were shown for Thursday, with few if any sales reported. All beef export sales in the week of 7/5 rose to 16,226 MT, with shipments shown at 15,285 MT. The USDA showed total US beef consumption in 2018 up 25 million pounds to 27.15 billion in their months S&D update.

Aug 18 Cattle closed at $105.025, up $1.175,

Oct 18 Cattle closed at $107.600, up $1.350,

Dec 18 Cattle closed at $111.575, up $0.900,

Aug 18 Feeder Cattle closed at $151.025, up $1.625

Sep 18 Feeder Cattle closed at $150.975, up $1.550

Oct 18 Feeder Cattle closed at $151.275, up $1.325

Lean hog futures ended Thursday with most contracts $1.10 to $2.475 higher, as soon to expire July up 17.5 cents. The CME Lean Hog Index was down 15 cents on July 10, to $81.52. The USDA pork carcass cutout value was down 9 cents on Thursday afternoon at $83.51. The national base carcass price was down 88 cents from the previous day, reported at $75.21. USDA estimated FI hog slaughter at 1.816 million head through Thursday, 57,000 head above last year. Weekly pork export sales totaled just 9,195 MT, as 18,461 MT of pork was shipped. This morning’s WASDE report from the WAOB showed pork production in 2018 up 30 million pounds from last month to 26.745 billion. The WASDE also showed a $1 increase to the expected average price range for barrows and gilts for full year 2018.

Jul 18 Hogs closed at $79.950, up $0.175,

Aug 18 Hogs closed at $70.425, up $1.625

Oct 18 Hogs closed at $53.950, up $1.925

Cotton futures closed the Thursday session with limit gains nearly across the board. The USDA dropped their US cotton production projection to 18.5 million bales, down 1 million bales from last month on fewer harvested acres. That helped bring the new crop ending stocks down 700,000 bales to 4 million bales, even with 17/18. Old crop world stocks were cut by 3.26 million bales to 84.96 on increased consumption and smaller beginning stocks. New crop world stocks were also reduced by the same factors to 77.84 million bales. Export sales of old crop upland cotton in the week that ended on July 5 were tallied at 121,603 RB, with just a little over 3 reporting weeks left in the MY. China bought 5,600 RB for old crop. New crop sales were reported at 251,429 RB. The weekly USDA AWP was updated to 76.17 cents/lb through next Thursday, up 1.58 cents from the week prior.

Oct 18 Cotton closed at 89.240, up 400 points,

Dec 18 Cotton closed at 88.540, up 400 points

Mar 19 Cotton closed at 88.350, up 400 points

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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