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AgriCharts Market Commentary
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Corn futures are trading a couple cents higher after gains of 3 1/4 to 4 3/4 on Wednesday. The big impetus was a retreat in the US dollar index, offering some potential for improved export sales. US ethanol production slowed slightly last week, with EIA down 7,000 bpd to 991,000 bpd. Weekly EIA ethanol stocks jumped 877,000 barrels to 19.92 million after setting a multi-month low last week. Trade estimates for the USDA weekly export sales report due out this morning are running 850,000 MT to 1.2 million MT.
Soybean futures are currently trading another penny higher this morning after double digit gains on Wednesday. Meal was up more than $10/ton in each of the front three contracts to support the bean product value. July-September soy crush for Brazil and Argentina was down 3 MMT vs. year ago. That implies reduced availability of meal and oil, tilting demand to the US. Traders are looking for the USDA weekly Export Sales report to show large soybean bookings of 1.5 to 2.5 MMT, with more than 900,000 MT of that “known” business. Meal bookings are seen at a pedestrian 200-400,000 MT. We note that the Brazilian Real hit a new high for 2016 (3.13:1) against the dollar yesterday, making their beans relatively more expensive to the Chinese.
Wheat futures are trading mostly 1 to 4 cents higher this morning after gains in all three markets on Wednesday. The weaker dollar was of some assistance. The CME Group reported that volume in its new EU Wheat Futures contract hit 50,967 contracts in 30 days. Average daily volume was 2,884 last week, which is paltry by CBT wheat standards but pretty good for a new contract roll out. Trader ideas for the USDA weekly Export Sales report this morning range from 350,000 to 550,000 MT.
Live cattle futures settled 32 to 90 cents higher on Wednesday. Feeder futures were up $0.42 to $1.27 despite higher feed costs. The CME Feeder Cattle Index was up 27 cents to $119.95 but still at a discount to futures as we head into expiration of the October contract today. Wholesale prices were mixed today, with light to moderate demand and packer offerings. Choice boxes averaged 24 cents per hundred higher, while Select boxes were 47 cents lower than Tuesday. Cash cattle activity has been too light to establish a trend. Asking prices appear to be $103-105. October cattle futures expire on October 31. Week to date FI slaughter at 343,000 head is down 2,000 from last week but 9,000 above year ago to the same Wednesday.
Lean hog futures closed 2 to 42 cents lower on Wednesday, with December the weakest. The CME Lean Hog Index continues to leak lower, losing 82 cents to $51.67. That is still well above December futures in the $44.20 area. The USDA average pork carcass cutout value was down 38 cents in the pm report to $73.08. The USDA national base price was 51cents lower with a weighted average of $44.88. The WCB average was 61 cents lower at $45.05, while the ECB average was down 15 cents at $44.30. Week to date FI slaughter is estimated at 1.309 million head. That would be 13,000 below last week, but 17,000 ahead of year ago.
Cotton futures are trading 7 to 27 points higher to this morning. They rallied 76 to 85 points on Wednesday courtesy of a weaker dollar. The Cotlook A Index is 78.15, down 30 points from the previous quote. Traders are looking for weekly US cotton Export Sales through October 20 to be slower than the 340,200 RB reported last week. That figure was the second largest of the marketing year. Official Chinese cotton imports for September from all sources were 60,384 MT, equivalent to 277,338 statistical (480 lb) bales. The announced Chinese import quota is UNCH from the previous year. The weekly AWP for this week is at 60.66 through Thursday.