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AgriCharts Market Commentary
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Corn futures closed 2 1/2 to 4 cents higher today. The weekly ethanol stocks tightened 300,000 barrels despite a jump in daily production to 969,000 bpd last week. Weekly gasoline use was hit a 5 year high, boosting blend use. Low prices cure low prices! The International Grains Council is projecting world production of 961 MMT for 2015/16, down from 974 MMT last year. Use is expected to be 974 MMT. South Africa hiked estimated production slightly to 10.8 MMT, but that is still the smallest crop since the 7.86 MMT seen in 2007. Trade estimates for the weekly USDA Export Sales report are from 650,000 to 1,150,000 MT.
Soybean futures settled 1 to 4 3/4 lower after posting a 12 1/4 cent trading range on the session. November beans inked yet another life of contract low, however July held 1 1/4 cents above its recent low posted on Tuesday. Beans were pressured by a $3.30/ton loss in bean meal, but aided by a 33 point bounce in soy oil. Traders are expecting an announcement from EPA on the biofuels mandated levels, with an expected increase in biodiesel. Heading into the weekly USDA report tomorrow morning, total soybean export commitments are 103% of the total projection for the year; the five year average is 100% for the same time period. Trade estimates for the weekly report are from 350,000 – 650,000 MT for soybeans, and 125,000-350,000 MT for soybean meal.
Wheat futures were steady to 1 3/4 lower in KC HRW. Chicago was up 1 to 2 3/4 cents, with MPLS up 1 1/4 to 2 1/2 cents today. Egypt bought 240,000 MT of wheat for early July delivery in their tender. Of that quantity, 25% was Romanian origin and the rest will come from Russia. The International Grains Council is now projecting 2015/16 world wheat production at 715 million metric tonnes. EU wheat export licenses dropped sharply from last week to 228,465 MT. The year to date total is still huge at 29.314 MMT. Trade estimates for the weekly USDA Export Sales report in the morning are 175,000 to 500,000 MT. This report will be through May 21. The wheat marketing year ends on May 31.
Live cattle futures settled 12 to 132 higher, with the front three contracts showing triple digit gains. The cash cattle market has been holding its ground, and we see sporadic bounces in the futures from their deeply discounted level. They still have a month to converge with cash. Estimated week to date FI slaughter is 364,000 head vs. 350,000 for the same period a year ago. Cash cattle trade will take a while to develop, with packer offerings apparently $157 and asking prices at $163 ($258-259 in the North). Wholesale beef prices were lower today with choice off $1.86 and select off $3.14; both lost more than 1% from Thursday to Thursday.
Lean hog futures settled 17 to 130 higher, with July the only month in triple digit territory. The CME Lean Hog Index was down 40 cents at $82.51. Negotiated carcass base prices were 23 cents higher in the ECB and $1.48 higher in the WCB. USDA reported the national weighted average pork carcass cutout value lost $2.04 on the day, its biggest single day loss since February 3rd. Estimated week to date hog slaughter is 1.275 million head, compared to 1.258 for the same period a year ago. The weekly pork export sales report was delayed until Friday because of the Monday holiday in the US.
Cotton futures settled mostly 94 to 128 points higher on the day. The USD traded higher but settled lower on profit taking late in the session. USDA is expected to show a lower AWP and larger LDP tonight for next week, limiting cash sales interest. The Cotlook A Index is UNCH at 71.25, with the Forward A down 0.30 at 74.05. Cert stocks are currently at 122,220 bales, with another 4,277 bales added on May 27.