Brugler Marketing & Management, LLC -

Ag Market Commentary

Alan Brugler - Barchart - Wed Aug 12, 4:55PM UTC

Corn futures are up 1 1/2 to 2 cents from a sell the rumor buy the fact reaction to the USDA numbers. Analysts were anticipating bearish increases to yields and production, but the 181.8 bpa yield forecast was more bearish than the average estimate of 180.5. That brought production up by 278 mbu to 15.278 bbu. Carryin was dropped down via a 20 mbu shift to 19/20 exports. New crop ending stocks were less than the trade expected, at 2.756 billion bushels. This morning EIA data revealed average daily ethanol production for the week ending Aug 6 was 918k barrels. That was 13k bpd fewer than the week prior, but stocks fell 596k barrels to 19.75 million. That is the lowest ethanol stockpile since the week ending December 30 of 2016. New crop corn use for ethanol was estimated at 5.2 bbu, which was UNCH vs. the July WASDE. USDA revised global corn production for 2020/21 higher by 7.82 MMT to 1.171 BMT. World ending stocks are estimated to be 317.46 MMT for 2020/21. That is up 2.42 MMT from July.

Sep 20 Corn is at $3.13, up 1 1/2 cents,

Dec 20 Corn is at $3.25 1/2, up 2 cents,

Mar 21 Corn is at $3.36 3/4, up 1 1/2 cents,

May 21 Corn is at $3.44 1/2, up 1 1/4 cents,

--- provided by Brugler Marketing & Management

Through midday, the soy complex is mostly higher. Soybeans are gaining 1 3/4 to 3 cents in the front month futures. Meal futures are down 40 to 60 cents/ton. Bean oil futures are up 54 to 68 points so far. This morning, USDA announced the sale of 258,000 MT of new crop soybeans to China. Another sale of 120k MT of new crop beans was reported to unknown destinations. The first data driven yield forecast from USDA is 53.3 bpa, up 3.5 bpa from the July trend yield forecast. The average of pre report estimates was 51.2 bpa. Soybean production was increased 290 mbu to 4.425 bbu. That was above estimates, reflecting the larger than expected yield increase. Carryin is 615 mbu, which is down 5 mbu from July on a higher crush estimate. New crop ending stocks are forecasted at 610 mbu. USDA foresees the 2020/21 average cash bean price at $8.35/bu – down by 15 cents from last month. NMY’s meal cash price is $290/ton, and oil was upped a penny to 30 cents/lb. Given USDA’s new crop crush forecast of 2180 mbu (up by 20), the 51.425 million tons of meal produced has implied yield at 47.18 lbs/bu. Implied yield for soy oil is 11.59 lbs/bu, with USDA estimated 25.27 billion lbs to be produced NMY.

Aug 20 Soybeans are at $8.78, unch,

Sep 20 Soybeans are at $8.71 3/4, up 1 1/4 cents,

Nov 20 Soybeans are at $8.74, up 1/2 cent,

Jan 21 Soybeans are at $8.79 1/2, up 1/2 cent,

Sep 20 Soybean Meal is at $283.50, down $0.60

Sep 20 Soybean Oil is at $31.16, up $0.54

--- provided by Brugler Marketing & Management

Wheat markets are in the red again at midday. SRW wheat futures are down 3 3/4 to 5 1/4 cents. KC wheat is falling back 1 1/4 to 3 1/2 cents. Spring wheat futures are firm to 2 1/2 cents lower so far. The new crop production estimate for wheat is 1.838 bbu, up 14 mbu from July. The average trade estimate was for an 8.7 mbu bump. Hard red spring wheat was increased 28 mbu to 530 mbu. USDA expects 975 mbu of wheat will be exported this MY, increasing the U.S. market share 0.29 ppts to 14.12% of the global export supply yr/yr. Globally, wheat production was cut by 3.28 MMT to 766.03. Gains to Russian and Ukrainian production were offset by cuts to EU and Argentina.

Sep 20 CBOT Wheat is at $4.90 1/2, down 4 1/2 cents,

Sep 20 KCBT Wheat is at $4.15 1/2, down 1 1/4 cents,

Sep 20 MGEX Wheat is at $4.92 3/4, unch,

--- provided by Brugler Marketing & Management

Yesterday, there were 6 more tenders against August fat cattle futures, the total through the first two days of deliveries is now 12 contracts. August is trading $1.55 higher so far, the other front month cattle futures are up 72 cents to $1.40 at midday. Feeder cattle futures are also rallying triple digits on Wednesday with gains of as much as $2.32. The CME Feeder Cattle index was back down by 28 cents to $142.33. There were reports of $105 activity in KS this morning. The FCE online cattle auction this morning sold 602 of the 890 head listed for a wtd average price of $104.41. Packers passed on $105 asks, but bid up to $104.50 for four pens. From the August WASDE report, USDA expects 2020 beef production will be 27.028b lbs. That is up 94m lbs from the July estimate, via an increase in the second half of the year. 2021 beef production is expected to increase 2.2% yr/yr to 27.62m lbs, as USDA revised the second half of the year 100m lbs lower. Wholesale boxed beef prices were higher in the AM report. Choice boxes were $208.64 up by 56 cents. USDA’s estimate for the week’s FI cattle slaughter through Tuesday was 230,000 head. That was 1,000 head above last week, but trailing the same week last year by 2,000 head.

Aug 20 Cattle are at $106.200, up $1.550,

Oct 20 Cattle are at $109.700, up $1.400,

Dec 20 Cattle are at $112.725, up $1.050,

Aug 20 Feeder Cattle are at $145.900, up $1.400

Sep 20 Feeder Cattle are at $148.675, up $2.050

Oct 20 Feeder Cattle are at $149.625, up $2.000

--- provided by Brugler Marketing & Management

Front month lean hog futures are trading lower through Dec and in May ’21, but Feb and April ’21 are up 15 and 7 cents respectively. The 08/10 CME Lean Hog index was $53.79 up by another 78 cents. USDA’s National Average Morning Base Hog price for Wednesday morning was 7 cents stronger at $37.50. From the August WASDE report, USDA expects 2020 pork production will be 28.36b lbs. That is down 179m lbs from the July estimate, via a 140m cut in 3Q20 production. 2021 pork production is expected to increase 0.7% yr/yr to 28.57b lbs – UNCH from July. USDA’s National Pork Carcass Cutout value was up $0.49 to $70.88. Hams were $14.04 higher in the AM quote to $61.88. USDA has the WTD hog slaughter at 915,000 head through Tuesday. That was 36k head above the week prior, but down 16k yr/yr.

Oct 20 Hogs are at $51.175, down $0.650,

Dec 20 Hogs are at $53.050, down $0.250

Feb 21 Hogs are at $60.700, up $0.100

--- provided by Brugler Marketing & Management

The initial report response has front month futures down by 66 to 82 points. New crop cotton yield was upped by NASS to a record 938 lbs/acre. That is 14% above last year and 4% above the previous record for August of 2018/19. USDA revised new crop production 0.58 m bales higher as well, to 18.08m bales. Old crop stocks were increased 0.1m bales, raising carryin to 7.2m bales. USDA also raised new crop stocks to 7.6m bales on the larger crop. USDA did leave the average farm price of new crop cotton UNCH at 59 cents/lb. Globally new crop cotton stocks were hiked 2.14m bales to 104.91m bales. The August 11 Cotlook A index was 69 cents/lb after a 25 point bump. The AWP for cotton is 49.44 cents/lb through Thursday. The week’s LDP is 2.56 cents/lb.

Oct 20 Cotton is at 63.03, unch,

Dec 20 Cotton is at 62.67, down 82 points

Mar 21 Cotton is at 63.57, down 76 points

May 21 Cotton is at 64.2, down 76 points

--- provided by Brugler Marketing & Management

Market Commentary provided by: <img src="https://s3.amazonaws.com/images1.aws.barchart.com/logos/bruglerlogo.gif" border="0" /> Brugler Marketing & Management LLC 1908 N. 203rd St.Omaha, NE 68022 Phone: 402-697-3623 Fax: 402-289-2353 E-mail: <a href="mailto:alanb@bruglermktg.com">alanb@bruglermktg.com</a> Web: <a href="http://bruglermarketing.com/">http://bruglermarketing.com</a>   <div class="MsoNormal" align="center"> Did you know Brugler Marketing & Management has more to offer to you than just this free daily commentary?! Producers just like you rely on our custom research and daily guidance on when and how to market their commodities. Click <a href="http://www.bruglermarketing.com/BruglerSampler">here</a> to learn more about what we have to offer, or call 402-697-3623. Do it today! <hr /> Do you want to know what trades Alan Brugler recommends? Subscribe to Ag Market Professional, and become part of the Brugler client group! Not sure? Ask for a FREE SAMPLE and get two FREE GIFTS! <a href="http://www.bruglermarketing.com">Start here</a> </div> Want this Ag News delivered to your inbox? <a href="http://www.agricharts.com/forms/ac_ag.php">Get the FREE Brugler Ag Newsletter, delivered 3 times daily.</a>