Ag Market Commentary

Corn futures are trading fractionally lower this morning after closing 1 to 2 cents lower on Monday. The USDA Export Inspections report showed slow corn shipments of 375,951 MT during the week of November 9. That is 45% lower than this time last year and 17.62% below the previous week. The Monday afternoon NASS Crop Progress report showed the US corn harvest 83% complete as of Sunday vs. the average of 91%. Total export commitments have met 39.66% of the just increased USDA export projection, compared to 47% last year and the average of 43%. The Monday edition of the CFTC Commitment of Traders report showed spec funds in corn futures and options adding 2,861 to their net short position of 205,624 contracts on 11/7.

Soybean futures are currently 1 to 2 cents higher after posting losses of 9 to 13 3/4 cents on Monday. Preliminary open interest rose 3,582 contracts, with most of those in the May 2018 futures. December meal was down $3.20/ton, with nearby bean oil 48 points lower. The USDA reported that the US soybean harvest was 93% done as of 11/12, with the average pace @ 95%. Monday morning’s USDA Export Inspections report showed 2.087 MMT in soybean exports for the week ending 11/9. That is a drop of 16.27% from last week and still lags last year by 29.12%. Soybean export commitments are now 51% of the full year USDA export estimate vs. the average of 67% for this date and last year’s 64%. The Brazilian record crop overhang has diminished, but it still a market factor.

Wheat futures are mostly 1 to 2 cents lower this morning. They finished Monday with most CBT and KC contracts 4-7 1/4 cents lower, as MPLS was down 7 to 14 1/4 cents. Preliminary open interest rose 11,155 contracts in Chicago, indicating net new selling. The US winter wheat crop was 95% planted as of Sunday, with 84% emerged. The USDA also reported conditions deteriorating 3 points on the Brugler500 index to 348, as gd/ex ratings were down 1% to 54%. The correlation between fall condition ratings and following year wheat yields is weak. The USDA Export Inspections report showed wheat for the week ending November 9 improving over last week by 5.57% at 301,039 MT. That was also 7.84% larger than the same week last year, as YTD inspections lag last year by 5.69% at 11.728 MMT.

Live cattle futures settled the Monday session with most contracts steady to 35 cents lower. Feeder cattle futures were mostly lower, with Nov 22.5 cents higher ahead of Thursday’s expiration. The CME feeder cattle index was 62 cents higher at $160.00 on November 10. Wholesale beef prices were lower on Monday afternoon. Choice was down $1.04 at $212.81, with select boxes 68 cents lower at $193.83. USDA indicated FI cattle slaughter for Monday was 117,000 head, matching week ago and 3,000 larger than the same Monday in 2016. The Cattle on Feed report will be released this Friday at 2:00 p.m. CST. Managed money spec funds added another 11,576 contracts to their net long position in live cattle futures and options. That net position was at 132,032 contracts for the week that ended November 7. Some of those new arrivals are now obviously under water.

Lean hog futures closed the day with mixed trade, as Dec was 17.5 cents lower with back months higher. The CME Lean Hog Index for 11/9 was down 47 cents to $67.47. The national base hog average was down 48 cents at $58.94 Monday afternoon. The USDA pork carcass cutout value for Monday afternoon was 53 cents lower at $81.39. Spec traders in lean hog futures and options held a net long position of 78,206 contract for the week ending Nov 7. During that week, they added another 10,314 contracts to their net long position. The daily USDA AMS hog slaughter report showed 464,000 for Monday, up 4K from the previous week and 26,000 larger than the same Monday in 2016.

Cotton futures are 22 to 32 points higher this morning after settling 17 to 35 points lower on Monday. The US dollar index was 114 points higher yesterday but is down more than 300 points this morning. The US cotton harvest progressed another 10% over the last week and was reported at 64% complete as of Sunday, even with the average pace. Online cash sales reported by The Seam were down to 4,735 bales, as prices fell 16 points to 68.24 cents/lb. The USDA average world price (AWP) was updated to 61.38 cents/lb, 33 points higher than the previous week. The Cotlook A index for November 10 was 25 points lower to 79.35 cents/lb. The Commitment of Traders report showed managed money lowering their net long position by 2,431 contracts. That net position stood at 44,883 contracts for the week that ended 11/7.

Market Commentary provided by:

Brugler Marketing & Management LLC
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