Ag Market Commentary

Corn futures are trading mostly 2 to 3 cents higher this morning. They closed Tuesday with most contracts 3 1/2 to 6 cents lower but Dec did finish 6 cents off the intraday low. In the USDA supply and demand report, the US corn yield was raised 0.4 bpa to 169.9 bpa. This caused production to rise 31 mbu to 14.184 bbu. The US 17/18 ending stocks number was increased 62 mbu to 2.335 bbu, with FSI dropping 75 mbu (ethanol down 25 mbu). The USDA also dropped the national cash average midpoint estimate 10 cents to $3.20. Old crop ending stocks dropped 20 mbu to 2.35 bbu. Exports for 16/17 were increased 70 mbu to 2.295 bbu, with corn used for ethanol down 15 mbu. On the world side of things, the USDA shifted 17/18 world ending stocks +1.6 MMT to 202.47 MMT.

Soybean futures are currently 4 cents higher. On Tuesday, they settled 7 1/2 to 10 1/2 cents lower. Sept soy meal was down $3.80/ton, with nearby bean oil 5 points higher. The NASS adjusted their 2017 US national soybean yield 0.5 bpa higher to 49.9 bpa. NASS increased production 50 mbu to a record 4.431 mbu with any harvested acreage change deferred until October. Old crop ending stocks were trimmed 25 million bushels on stronger exports and crush. New crop US ending stocks were unchanged from the August report at 475 mbu. A 25 mbu increase in exports and lower beginning stocks offset larger production. The 17/18 cash average process was lowered a dime to $9.20.World ending stock for 17/18 shifted down just 0.25 MMT to 97.53 MMT.

Wheat futures are mostly 3 to 4 cents higher this morning in the KC and CHI contracts, with MPLS spring wheat up 1 to 2 cents per bushel. They finished the Tuesday session with most KC and CHI contracts higher and nearby MPLS contracts steady. The US supply and demand table was left unchanged for 17/18, with production at 1.739 bbu, and ending stocks at 933 mbu. They are waiting on the September 29 Small Grains report for data. World wheat ending stocks for new crop was adjusted to 263.14 MMT, a 1.55 MMT drop from August. Russian production was increased 3.5 MMT to 81 MMT, while Australian and EU production ideas were reduced. Japan is seeking 139,382 MT of wheat from Australia, Canada and the US in their weekly MOA tender. It calls for 55,645 MT of US wheat, with results expected Thursday.

Live cattle futures ended the Tuesday session with most contracts 35 cents to $1.325 lower. Feeder cattle futures were down a nickel to 50 cents. The CME feeder cattle index was down 4 cents from the previous day at $148.97 on September 11. Wholesale beef prices were mixed in the Tuesday afternoon report, with the Ch/Se spread flipping to the negative side. That usually only occurs in February or March. Select is now showing a 7 cent premium giving feedlots little incentive to add finish. Choice was down 77 cents at $190.79, as select boxes were 48 cents higher at $190.86. FI cattle slaughter was estimated at 233,000 head through Tuesday, which is 10,000 head larger than the same week in 2016. The FCE online auction will show 1,063 head for sale, with a majority from KS.

Lean hog futures were down 40 cents to $2.125 yesterday. The CME Lean Hog Index for 9/8 was $1.02 lower than the previous day at $67.92. The USDA pork carcass cutout value was $1.67 lower at $80.41 in the PM report. The belly primal was down another $4.48 per cwt. The national base hog carcass was down $1.17 in the PM report at 55.99. Estimated FI hog slaughter was 901,000 through Tuesday, 22,000 larger than the same week in 2016. Estimated annual pork production for 2017 was raised 35 million pounds by the USDA yesterday to 25.841 billion pounds.

Cotton futures are trading 22 to 101 points lower this morning after they posted limit losses in the nearby contracts yesterday. There are expanded limits today. The USDA raised the 2017 US cotton yield 16 lbs/ac to 902 lbs/ac, shocking those expecting to see at least some weather related losses. Average yields were raised in all states except CA, AR and GA. US 2017 production rose 1.21 million bales to 21.76 bales. US new crop ending stocks rose 200,000 bales to 6 million bales. USDA indicated they will some re-survey states for harvested acreage in October. World ending stocks for 2017/18 jumped 2.45 million bales to 92.54 million bales. Production for India, Brazil, and Australia was raised along with the US. The Cotlook A index for September 11 was35 points higher at 84.4 cents/lb.

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