Ag Market Commentary

Corn futures are mostly 3 cents lower this morning. They were steady to 2 cents lower in the front months and higher in some 2020 contracts on Friday. July futures lost 5.12% for the week. USDA hiked estimated old crop corn stocks 60 mbu to 2.095 bbu. Their initial new crop carryover projection is 2.485 bbu, a 390 mbu jump from the 2018/19 number. Production was estimated at 15.03 bbu based on a weather adjusted trendline yield of 176 bpa. Brazil corn production was raised 4 MMT to 100 MMT, with Argentina up 3 to 49 MMT. The old crop ending stocks estimate jumped 11.93 MMT to 325.94 MMT. New crop carryover for 2020 was projected at a smaller 314.71 MMT. The Friday afternoon Commitment of Traders report showed managed money specs in corn futures and options trimming their net short position as of May 7 by 24,372 contracts to 282,327 contracts. Trade ideas for US corn planting progress are in the 35-37% range vs. 69% average for this date.

--provided by Brugler Marketing & Management



Soybean futures are 6 to 8 cents lower to begin the week after ending Friday 1 to 3 1/2 cents lower. July was down 3.92% on the week. The monthly WASDE update showed old crop soybean stocks increasing 100 mbu from last month to 995 mbu, on a reduction to exports. Production for the upcoming season was pegged at 4.15 bbu, with a 49.5 bpa weather adjusted trend yield projection. New crop carryout was seen initially at 970 million. USDA left Brazilian soybean production at 117 MMT, with Argentina up 1 at 57 MMT. Chinese imports for 18/19 are now seen at 86 MMT. World carryout for old crop was revised upward by 5.82 MMT to 113.18 MMT. New crop was projected at 113.09 MMT. Money managers in soybean futures and option held a record reported net short position of 160,553 contracts on Tuesday, a move of 12,027 contracts from last week. Chinese trade reps left DC with no trade agreement. Traders are looking for US soybean planting progress to be around 15% complete in tonight’s NASS report, vs. the 26% average pace.

--provided by Brugler Marketing & Management



Wheat futures are trading 1 to 3 cents lower this morning. They posted 6 to 10 3/4 cent losses in most KC contracts on Friday, with July down 3.61% this week. CBT July lost 3.03% Friday to Friday. MPLS was higher for the week due to planting delays. Trade ideas for tonight’s report have spring wheat planting 34-37% complete vs. the five year average of 70% done. USDA cut feed use, export use and other categories to boost their old crop ending stocks estimate to 1.127 bbu. New crop stocks are expected to be around 1.141 bbu. Production for 2019 is seen at 1.897 bbu. They have HRW production at 780 mbu, with SRW at 265 mbu. The WASDE did show a 0.63 MMT reduction to world ending stocks at 274.98 MMT for the 18/19 crop. The first 2019/20 estimate of the year was 293.01 MMT, a 18.03 MMT yr/yr jump with sharp recoveries in production for Australia, Canada and Russia (well below private estimates at 77 MMT). Spec traders in the KC wheat futures and options market extended their record large net short to 58,866 contracts as of Tuesday.

--provided by Brugler Marketing & Management



Live cattle futures saw 50 cent to $2.075 gains in most contracts on Friday. Feeder cattle futures were up $1.375 to $2.825. CFTC data showed managed money dropping their net long position in live cattle futures and options by 24,881 contracts in a week to 104,701 contracts. The two-week drop of 49,849 contracts is the largest on record. The CME feeder cattle index was down 32 to $135.52 on May 9. Wholesale boxed beef prices were mixed on Friday afternoon. Choice boxes were down $1.36 at $221.11 with Select boxes 38 cents higher @ $207.46. USDA estimated weekly FI cattle slaughter at 664,000 head. That was down 6,000 head from the previous week and 9,000 above the same week last year. USDA projected 2019 beef production at 27.269 billion pounds, a 11 million pounds drop from April. Production for 2020 is seen at 27.51 million pounds in USDA’s initial projection.

--provided by Brugler Marketing & Management



Lean Hog futures were steady to 60 cents lower in the front months on Friday, with deferred contracts higher. June was down $3.32 last week. The CME Lean Hog Index was up 8 cents from the previous day @ $82.76 on May 8. The USDA pork carcass cutout value was down 66 cents at $86.16 on Friday afternoon. The national average base hog was $80.80 on Friday, up 28 cents from the previous day. Estimated weekly FI hog slaughter was 2.341 million head. That was 41,000 head below the previous week but 35,000 above the same week last year. Pork exports during March were reported at 515.412 million pounds according to Census data. That was a jump of 13.9% mo/mo but down 4.2% from last year’s March record. USDA’s initial 2020 US pork production projection is 28.285 billion pounds.

--provided by Brugler Marketing & Management



Cotton futures are down 106 to 161 points this morning. They posted triple digit losses in the front months on Friday, as July was down 9.55% in a single week. Cotton is at risk should the Chinese decide to raise tariffs in response to the last US hike, as they are still buying US cotton. The WASDE 2018/19 US balance sheet saw a 250,000 bale increase to stocks at 4.65 million bales, thanks to a reduction to expected exports. The first 19/20 balance sheet of the year showed a 1.85 million bale jump in new crop carryout to 6.4 million bales, with production seen at 22 million bales and exports of 17 million bales. World cotton stocks for old crop saw a marginal 0.03 increase to 76.47 million bales. New crop is seen at 75.69 million bales, with Chinese imports expected to increase 2.5 million bales to 11 million. The weekly Average World Price (AWP) is now 64.65 cents/lb, down 3.62 cents from last week. Spec in cotton futures and options flipped their net position back to short by 15,088 contracts in the week of May 7 to -4,841 contracts.

--provided by Brugler Marketing & Management






Market Commentary provided by:

Brugler Marketing & Management LLC
1908 N. 203rd St.Omaha, NE 68022
Phone: 402-697-3623
Fax: 402-289-2353
E-mail: alanb@bruglermktg.com
Web: http://bruglermarketing.com

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