Ag Market Commentary

Positioning ahead of USDA’s reports has corn futures steady to 1 cent lower. Yesterday, futures closed fractionally mixed. Corn has dropped 34 cents per bushel since the July USDA report in anticipation of bearish production numbers in this report. The average trade estimate ahead of USDA is for a 176.5 mbu bump to new crop production by way of a 180.5 bpa yield. Analysts expect that additional corn will go to ending stocks, with an average estimate of 2.823 bbu – up 175.8 mbu if realized. Old crop stocks are estimated to receive a 21.1 mbu bump as well. CONAB released their monthly Brazilian production estimate. They raised both first and second corn crops for a net increase of 1.58 MMT to 102.142 MMT. This is for the double crop currently being harvested, not 2021/22. Analysts expect USDA will leave their estimate at 101 MMT for Brazil.

--- provided by Brugler Marketing & Management

Soybeans are fractionally lower this morning ahead of USDA’s reports. Front month beans closed fractionally mixed on Tuesday. Meal futures fell back in the afternoon, closing near the lows and down by as much as 30 cents/ton. Bean oil futures ended the Tuesday session 11 to 18 points in the red. November soybeans have dropped roughly 27 cents per bushel since the July USDA report in anticipation of bearish numbers in today’s report. Ahead of USDA’s August reports, traders anticipate a higher US average bean yield of 51.2 bpa on average. The average pre-report estimate for new crop production is 4.259 bbu. Analysts expect a 101 mbu bump to new crop stocks, with the average of estimates at 526.3 mbu. CONAB lowered their soybean production estimate slightly to 120.883 MMT. --- provided by Brugler Marketing & Management

Wheat markets are 1 to 4 cents per bushel lower this morning, with Chicago SRW the weakest. SRW wheat futures were up by 3 to 4 cents at the closing bell on Turnaround Tuesday. The national average wheat cash price (SRW) from cmdtyView was $4.78, which was 4 cents stronger on the day. KC HRW futures recovered 1 to 2 3/4 cents. And MGE wheat closed with gains of as much as 2 cents. The average estimate for 2020/21 wheat production ahead of USDA’s report is for 1.833 bbu. That would be up by 8.7 mbu from July if realized. Trade expects most of the increase to come via a 10.6 mbu bump to spring wheat. Egypt’s GASC purchased 120k MT of Russian wheat for last half September and first half October.

--- provided by Brugler Marketing & Management

The front month cattle futures closed $0.47 to $1.15 higher on the day. Feeder cattle futures also rallied triple digits on Tuesday with gains of as much as 0.84%. The CME Feeder Cattle index was back down by 28 cents to $142.33. USDA reported Tuesday sales in KS and WCB at $103 and $103-$105 respectively. Northern dressed bids were $163-$165 with no sales confirmed. Asking prices have been around $168. The FCE online cattle auction has 890 head listed for this morning’s sale. Wholesale boxed beef prices were higher on Tuesday, tightening the Chc/Sel spread to $13.06. Choice boxes were up 88 cents to $208.08 cwt. while Select boxes strengthened by $1.09. USDA’s estimate for Tuesday’s cattle slaughter was 117,000 head. WTD slaughter under federal inspection is at 230,000 head after a Monday revision lower. With 230,000 head through Tuesday, the week’s pace is 1,000 head above last week, but trailing the same week last year by 2,000 head.

--- provided by Brugler Marketing & Management

Turnaround Tuesday action saw front month lean hog futures lower as much as $2. August futures closed a nickel lower to $53.07 ahead of Friday’s expiration. The CME Lean Hog index was $53.02 on Aug 8, up by 58 cents. USDA’s National Average Afternoon Base Hog price for Tuesday was $1.01 weaker to $37.42. China’s CPI inflation index was up 2.7% in July mo/mo, led mostly by food prices. Domestic pork prices in China for the month of July were 10.3% higher mo/mo, and 85.7% higher yr/yr. China announced plans to sell another 10k MT of pork from state reserves on August 14. China has already auctioned 420k MMT of pork this year in an attempt to hold down prices. Tuesday afternoon’s National Pork Carcass Cutout value was up $0.32 to $70.39. USDA’s estimate for Tuesday’s FI hog slaughter is 458,000 head. After revising Monday lower, USDA has the WTD hog slaughter at 915,000 head. That is 36k head above the week prior, but down 16k yr/yr.

--- provided by Brugler Marketing & Management

Cotton is trading 13 to 18 points higher ahead of USDA first crop production forecast of the year. Front month cotton futures were up by 69 to 75 points at the closing bell on Tuesday. Stock market futures (S&P) traded at the highest level since February on Tuesday before fading into the close. They are higher this morning. Gold is down another $7-8, although well above the overnight lows. Monday sales on The Seam were 446 bales at an average gross price of 59.77 cents/lb. The Cotlook A index fell back 2 and a half cents on Aug 10, to 68.75 cents/lb. The AWP for cotton is 49.44 cents/lb through Thursday. The week’s LDP is 2.56 cents/lb.

--- provided by Brugler Marketing & Management

Market Commentary provided by:

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