Ag Market Commentary

Corn futures are mostly 1 cent per bushel lower this morning. They closed an uneventful Wednesday session with most contracts steady to fractionally lower. News on Wednesday was limited due to the government shut down. The weekly ethanol production and stocks update will be released this morning. Ahead of next Tuesday’s monthly S&D update, analysts are expecting US corn 18/19 carryout at 1.738 bbu, just 2 mbu more than their November projection. DTN reported a national average cash price of $3.45 1/2 on Tuesday evening, 36 cents higher than a year ago. That put the national average basis level at -26 3/4 cents, the strongest this marketing year (MY).

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Soybean futures are trading 4 to 5 cents lower this morning. They settled Wednesday with the front months higher for a fourth consecutive day, up 1 to 1 3/4 cents. Nearby soy meal was down 80 cents/ton, with soy oil 7 point lower. We will have USDA Export Sales data on Friday morning this week due to the federal shutdown on Wednesday. The average trade estimate for US 18/19 soybean ending stocks in next week’s WASDE report calls for a 10 mbu reduction to 945 mbu according to a Reuters survey. DTN’s cash soybean index showed an average national price of $8.23 3/4 on Tuesday evening. That was 98 cents lower than last year for this time, with the national basis 15 1/2 cents weaker at -$0.88 but improving.

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Wheat futures are currently UNCH to 4 cents lower in the actively traded contracts, with the CHI and KC December futures down 7 cents or more. Wheat was down 3 to 7 1/2 cents on Wednesday. Some of the sell pressure was long liquidation, with preliminary open interest in Chicago down 877 contracts. Traders are on average expecting USDA to add 7 mbu to their 18/19 US carryout projection at 956 mbu in next Tuesday’s December WASDE release. Export sales and shipments still lag last year with 6 months completed. Along with USDA delaying the weekly Export sales report to Friday, CFTC will be releasing their weekly Commitment of Traders report on Monday. Wire stories indicated Egypt’s GASC has failed to issue letters of credit on 945,000 MT or 16 cargoes of wheat. The Supply Ministry refuted those claims saying 3 had been issued and 5 more would be, with the remaining still to be delivered. Buying the break despite that news, GASC issued a new wheat buying tender for Jan 21-31 delivery with results due later today.

--provided by Brugler Marketing & Management

Live cattle futures ended Wednesday with most contracts 52.5 to 97.5 cents higher. Feeder cattle futures were also higher, with front months $1 to $1.20 higher. The CME feeder cattle index was down 33 on December 4 at $146.39. Wholesale beef prices were lower on Wednesday afternoon. Choice boxes were down 60 cents at $213.26, with the Select cutout value 65 cents lower at $196.86. USDA’s estimated FI cattle slaughter is at 360,000 head WTD, up 4,000 head from last week and 2,000 head large than a year ago. Wednesday’s FCE online auction saw sales on all 219 head offered, with the two lots selling @ $117.50-118.

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Lean Hog futures saw triple digit gains in the Feb through August contracts yesterday. Nearby Dec was down $1.025 as it needs to stay close to the cash market ahead of expiration. The CME Lean Hog Index was up 2 cents from the previous day @ $56.38 on December 3. The USDA pork carcass cutout value was up 82 cents on Wednesday afternoon at $71.70. The national base cash hog carcass value was down $1.14 yesterday afternoon at an average weighted price of $47.51. USDA’s FI hog slaughter was estimated at 477,000 head for Wednesday, bringing the WTD total to 1.422 million head. That was up 30,000 head from last week and 31,000 head larger than the same week last year.

--provided by Brugler Marketing & Management

Cotton futures are 118 to 125 points lower this morning after they posted 114 to 134 point gains in the front months on Wednesday. There were hopes that China follows through with the commitments to buy more US ag goods. The US dollar is a little weaker. However, the appointment of hard line USTR Lightheizer as chief negotiator and the arrest of a Huawei executive yesterday seemed to dim prospects of a deal. The Cotlook A index was 100 points higher than the previous day on Dec 3 at 87.80 cents/lb. The weekly USDA AWP is 67.92 cents/lb. The Cert stocks level as of December 4 was at 140,322 bales. There were deliveries of another 32 contracts against December overnight, again all stopped by an SG Americas client.

Market Commentary provided by:

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