Ag Market Commentary

Corn futures ended Wednesday with sharp 13 to 14 1/4 cent losses in the front months, following this morning’s bearish USDA reports. The weekly EIA report indicated that ethanol production in the week of 9/7 was down 67,000 barrels per day totaling 1.02 million bpd. Stocks rose 191,000 barrels at 22.894 million barrels. NASS updated their US corn yield number to 181.3 bpa, up 2.9 bpa from their initial August report. They now have record projected yield in most of the major Corn Belt states (NE, IA, IL, IN, OH, SD). That placed production at 14.827 bbu, with the new crop carryout up 90 mbu at 1.774 bbu. The USDA reported a 25 mbu reduction in old crop US stocks mainly from increased exports. World ending stocks for 17/18 were up 0.82 MMT to 194.15 MMT, with 18/19 1.54 higher at 157.03 MMT. FSA data, released after the close, showed producers enrolling in 928,157 acres of prevent plant for corn through September 1, up slightly from August. Export sales in the week of 9/6 are expected to be shown at 0.8-1.2 MMT for new crop on Thursday morning.

Sep 18 Corn closed at $3.41 1/2, down 13 3/4 cents,

Dec 18 Corn closed at $3.52 1/2, down 14 1/4 cents,

Mar 19 Corn closed at $3.65, down 13 1/2 cents

May 19 Corn closed at $3.73 1/2, down 13 cents

Soybean futures closed the Wednesday session with most contracts 8 to 9 cents in the green, on sell the rumor and buy the fact action. Soymeal was up $1.50/ton, with soy oil 10 points lower. The September USDA Crop Production report indicated US national average soybean yield at a record 52.8 bpa. That pushed 2018 production 107 mbu higher to 4.693 bbu. Old crop US carryout was reduced by 35 mbu on increased crush and exports. New crop went 60 mbu in the other direction thanks to the larger production, at 845 mbu. World ending stocks for 17/18 beans were reduced by 0.87 to 94.74 MMT, while new crop was 2.32 MMT higher at 108.26 MMT. USDA trimmed Chinese 2018/19 imports to 93.5 MMT, while the Chinese Ag ministry updated their own estimated imports to 83.65 MMT. Clearly the WAOB thinks the Chinese are talking their position and not what will eventually happen. Prevent planted acres submitted as of September 6 were totaled at 275,629 acres according to the FSA, slightly above August. New crop bean export sales in the week that ended last Thursday are estimated at 0.5-1 MMT.

Sep 18 Soybeans closed at $8.29, up 8 3/4 cents,

Nov 18 Soybeans closed at $8.40, up 8 1/4 cents,

Jan 19 Soybeans closed at $8.53 1/2, up 8 cents,

May 19 Soybeans closed at $8.78, up 8 cents,

Sep 18 Soybean Meal closed at $315.70, up $1.50,

Sep 18 Soybean Oil closed at $27.63, down $0.10

Wheat futures settled with 10 to 13 1/4 cent losses in the front months on Wednesday. The USDA left the 2018/19 US balance sheet UNCH, leaving the carryout at 935 mbu. They are waiting for better small grains data in the September 28 reports. No change was made to the US export forecast despite upward revisions in the Russian production. World ending stocks for 17/18 were up 1.29 MMT to 274.36 MMT, while the 18/19 carryout number was 2.33 higher at 261.29 MMT. Russian production was back up 3 MMT to 71 MMT, with Canada down 1 MMT and Australia down 2 MMT. India was 2.7 MMT higher. Acreage data released by the FSA showed that producers had enrolled in 371,772 prevent plant acres for wheat as of 9/6. That was 8,565 acres above August. Analysts are looking for USDA to show 18/19 wheat export bookings of 300,000-500,000 MT for the week of 9/6 on Thursday morning. Egypt’s GASC purchased 235,000 MT of Russian wheat in their latest tender on Wednesday.

Sep 18 CBOT Wheat closed at $4.81 3/4, down 12 cents,

Sep 18 KCBT Wheat closed at $4.82 1/2, down 11 3/4 cents,

Sep 18 MGEX Wheat closed at $5.51, down 13 1/4 cents

Live cattle futures saw 85 cent to $2.175 gains in most contracts on Wednesday. Feeder cattle futures were up $1.325 to $2.575. The CME feeder cattle index was up 54 cents on September 11 at $152.63. Wholesale boxed beef values were lower on Wednesday afternoon. Choice boxes were down $1.28 to $204.79, while Select boxes were $1.04 lower at $197.27. USDA estimated FI cattle slaughter at 357,000 head through Wednesday, which is 7,000 head above the same week in 2017. This morning’s FCE online auction saw no sales on the 444 head offered, with feedlots passing on bids of $108-108.25. The quarterly beef production table in this morning’s WASDE showed 2018 Production UNCH at 27.094 billion pounds. Third quarter production was trimmed by 65 million pounds, with fourth quarter production up that same amount.

Oct 18 Cattle closed at $111.475, up $2.175,

Dec 18 Cattle closed at $115.525, up $1.600,

Feb 19 Cattle closed at $119.500, up $1.100,

Sep 18 Feeder Cattle closed at $154.625, up $2.500

Oct 18 Feeder Cattle closed at $155.025, up $2.575

Nov 18 Feeder Cattle closed at $154.825, up $2.400

Lean hog futures posted 65 cent to $1.525 gains in most contracts. The CME Lean Hog Index was up 55 cents on September 10 to $47.55. The USDA pork carcass cutout value was $162 higher @ $70.86 in the Wednesday afternoon FOB plant report. The national base hog carcass value was $1.46 higher @ $47.48 this afternoon. FI hog slaughter through Wednesday was estimated at 1.338 head, down 31,000 head from the same week last year as plants along the East Coast prepare for Hurricane Florence. Projected pork production for 2018 was trimmed by 35 million points in this morning’s WASDE to 26.675 billion pounds, on lower third quarter production.

Oct 18 Hogs closed at $55.800, up $1.325,

Dec 18 Hogs closed at $55.625, up $1.525

Feb 19 Hogs closed at $64.700, up $1.375

Cotton futures were 25 to 36 points lower on Wednesday, closing nearly triple digits off their lows in December. This morning’s USDA report projected 2018 US cotton yield at 895 lb/ac, down 16 pounds from August. However, a higher acreage number at 14.04 million acres planted and 10.55 mill ac harvested increased production to 19.68 million bales. A larger export number helped to offset that with ending stocks up 100,000 bales from August to 4.7 million. New crop world cotton carryout was up 360,000 bales to 77.46 million bales. This morning’s Cotton Ginnings report indicated that 489,100 RB had been ginned as of September 1, all in Texas. That was down 14.3% from the same time last year. The Cotlook A index was up 170 points from the previous day at 93.40 cents/lb on September 11. The USDA weekly AWP is currently at 73.77 cents/lb, and will be updated on Thursday.

Oct 18 Cotton closed at 82.760, down 27 points,

Dec 18 Cotton closed at 82.640, down 25 points

Mar 19 Cotton closed at 83.030, down 28 points

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