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AgriCharts Market Commentary
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Corn futures closed with gains of 6 to 7 cents on the day, driven in part by strong gains in the bean meal, and implied planting delays for the second Brazilian crop. The July futures contract closed back above the $4 level. Friday is first notice day for December futures, with Wednesday as position day. The weekly report from the EIA will be out on Wednesday morning. The previous report showed the second largest weekly ethanol production figure on record, while ethanol stocks shrank more than 2.2% from the previous week. May corn futures on the Dalian exchange closed at the USD equivalent of $9.99.
Soybean futures were sharply higher on the day, as most contracts closed 3 to 4 cents off of their session highs. Strong price support came from the soybean meal and soybean oil markets; with their respective front month contracts up $15.70 and 22 cents on the day. The domestic crushers need beans to make meal for export and the export market for whole beans has been strong at this price level too. That is creating competition for the beans that are moving. About 97% of the US crop is harvested, but many farmers are apparently not interested in giving up their beans at this time.
Wheat futures posted solid gains on the day, up 9 to 13 cents in the front month contracts. The front month contracts for both KC and MGE wheat traded higher today than they had since early September. The US Dollar index was down more than 200 points on the day. Winter wheat condition ratings slipped 3 points lower on the Brugler500 Index, with some of the cold weather damage starting to show up, particularly in WA, NE and OH. Cold temperatures are also challenging the Russian crop production projections. The US crop is now estimated to be 92% emerged, which is 3 points ahead of the 5yr average.
Cattle futures were mixed on the day, with strength in the front months, and some weakness beyond the April contract. Feb futures settled a dollar higher on the day. Feeders finished with triple digit losses in all but the September 2015 contract. Wholesale beef prices were sharply higher today, with Choice boxes up $1.17 and Select up $1.42 in the afternoon AMS report. Week to date slaughter estimated at 228K head was 5K larger than a week ago, and 21K head smaller than a year ago.
Hog futures were weaker today, as the July contract ended its streak of 14 consecutive green candles. The instances of PED have reportedly picked up some with the cooler weather, but are not increasing as quickly as they did last year. We suspect better immunity overall in the sow herd. Hog slaughter so far this week is running ahead. The week to date estimate is 869K head, which is 22K head larger than a week ago, and 7K head larger than a year ago. The pork carcass cutout value was down $1.23 on the day. Bellies and Hams showed solid losses again today. The CME Lean Hog Index was down another 8 cents at $88.78. The ECB hog market was down 56 cents today, but the WCB market was 64 cents higher, while the IA/MN average price was up 67 cents.
Cotton futures ended the day with gains of 42 to 50 points. The Indian government announced plans to buy approximately 15% of its domestic cotton crop to help support prices this year. According to the November WASDE figures, the Indian government purchase program would account for approximately 4.65 million 480lb bales, which is about 91% of the projected US ending stocks, and 34% of the projected ending stocks for India. US cotton export commitments are currently 68% of the annual projection from the USDA, when the five year average for this date is 66%. The Cotlook A index is at 65.95, down 0.45 from yesterday.