Ag Market Commentary

Corn futures are trading mostly 1 cent per bushel lower this morning. They ended the Tuesday session with 6 to 7 3/4 cent gains in most contracts. Preliminary open interest shot up 16,036 contracts on net new buying interest. USDA reported another private export sale of 278,200 MT of corn for 19/20 delivery to Mexico. Prior to Thursday’s monthly USDA update, analysts expect to see a 41 mbu jump to old crop ending stocks at 2.401 bbu. New crop is seen dropping 251 mbu on a cut to production at 1.93 bbu. Brazil’s corn crop is expected to be 99.98 MMT according to CONAB, up 0.672 MMT from their previous estimate. USDA is using 101 MMT.

-- provided by Brugler Marketing & Management

Soybeans futures are 2 to 3 cents lower after posting 12 to 14 1/4 cent gains in the nearby contracts on Tuesday. Most of the buying was short covering, with new longs nibbling at January. Soybean meal was $4.40/ton, with soy oil 12 points higher. There were rumors again that China would be buying US Ag products to smooth negotiations, though advisor Navarro downplayed any expectations. Sales of soybeans and meal to Mexico were also supportive. USDA is expected to show a reduction of 25 mbu to old crop ending stocks to 1.045 bbu on Thursday. New crop carryout is estimated to be cut by 101 mbu to 654 mbu. The trade assumption there is lower production via a yield cut. That will likely be the key number to watch on Thursday, but there is always the risk of “buy the rumor, sell the fact”. CONAB updated their 18/19 Brazilian soybean crop estimate to 115.03 MMT, a slight increase from Aug and vs. USDA’s 117 MMT.

-- provided by Brugler Marketing & Management

Wheat futures are mostly 1 to 3 cents lower in all three US markets this morning. They saw 4 to 7 3/4 cent gains in most contracts on Tuesday, disregarding soon to expire Sep. This time there was some short covering, with preliminary open interest dropping 3,085 contracts in Chicago. Gains in corn supported the market. The US dollar index is sharply higher this morning. Ahead of Thursday’s USDA reports, analysts expect to see very little change to the 19/20 US wheat carry out estimate, up 2 mbu to 1.016 bbu. South Korea purchased 76,000 MT of US wheat in a tender on Tuesday. The French Farm Ministry raised their 19/20 wheat production estimate by 1.25 MMT to 39.45 MMT.

Source: Brugler Marketing & Management

Live cattle futures ended the Tuesday session with most nearby contracts $1.95 to $2.35 higher. They hit the lowest price on the front month continuation chart since 2010 on Monday. Feeder cattle futures were up $1.075 to $1.90 higher in the nearby contracts. The CME Feeder Cattle Index was 33 cents lower on September 9 at $137.44. Wholesale boxed beef prices were lower on Tuesday afternoon. Choice boxes were down $1.57 at $225.38, with Select boxes 94 cents lower @ $200.98. The Select boxes have declined 5% just since Labor Day. USDA estimated week to date FI cattle slaughter @ 231,000. That is down 8,000 head from the same week a year ago. A total of 636 head are listed for sale in this week’s FCE online auction.

-- provided by Brugler Marketing & Management

Lean Hog futures settled 12.5 cents to $1.825 higher in most contracts on Tuesday. The CME Lean Hog Index was down another 94 cents at $63.75 on September 6. The USDA pork carcass cutout value FOB plant was up 8 cents on Tuesday afternoon at $71.99. One would have expected a bigger pop in the cutout if the Chinese were actually buying. The national average base hog value was $1.72 lower at $48.93. Estimated FI hog slaughter was 970,000 head through Tuesday, 40,000 head above the same week in 2018. We will have to have a number of weeks later this fall with 2.5-2.6 million head runs.

-- provided by Brugler Marketing & Management

Cotton futures are trading 8 lower to 12 higher this morning, with the plus signs in 2020 contracts. They ended Tuesday with most contracts 12 to 64 points higher following a drop to crop conditions ratings. Condition ratings were shown falling 5% to 43% gd/ex, with the Brugler500 index dropping 13 points to 328. That is the lowest rating of the 2019 season. By state, TX lost another 12 points, with GA down 2 and TN deteriorating 33 points. The Cotlook A Index was down 50 points on September 9 at 70.15 cents/lb. The weekly AWP is 51.57, and still below loan rate.

-- provided by Brugler Marketing & Management

Market Commentary provided by:

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