Ag Market Commentary
BRUG - Mon Feb 11, 7:23AM CST

Corn futures are trading 1 to 2 cents lower to start the week. They ended the Friday session with most contracts steady to 2 1/4 cents lower, despite some bullish news from the USDA. Friday’s batch of USDA reports saw 2018/19 US yield slashed by 2.5 bpa to 176.4 bpa, which dropped production to 14.420 bbu. That was the largest production reduction from Nov to the final number since 2006. After several balance sheet revisions, 2018/19 ending stocks were trimmed by 46 mbu to 1.735 bbu. The quarterly Grain Stocks report showed Dec 1 corn stocks at 11.952 bbu, which is down 4.89% from last year. On the bear side, world ending stocks are projected at 309.78 MMT, up 1 MMT from the Dec number. Of the 309.8 MMT, China would be holding 207.8 MMT. USDA left the Brazil production number at 94.5 MMT, with Argentina at 46 MMT, up 3.5 MMT from December. CONAB is expected to update their Brazilian numbers on Tuesday.

--provided by Brugler Marketing & Management

Soybean futures are currently 2 cents per bushel lower after managing to squeeze out 1 to 1 1/2 cent gains in most contracts on Friday. Meal futures were up 60 cents/ton in the nearby contracts, with soy oil 6 points higher. The NASS Crop Production report showed US soybean yield at 51.6 bpa, down 0.5 bpa from the November update and below most estimates. That dropped production to 4.544 bbu. The new ending stocks projection from USDA is now at 910 mbu, 45 mbu below the previous number. In the quarterly Grain Stocks report, USDA showed Dec 1 soybean stocks at 3.736 bbu, a jump of 575 mbu from the year prior. In the world side of things, USDA saw tighter world carryout by ~8.61 MMT to 106.72 MMT. That was assisted by a 5 MMT cut to Brazil production as expected, now at 117 MMT. Argentina’s output number was down 0.5 to 55 MMT. Chinese soybean consumption was cut 3.5 MMT from the December figure, with imports lowered another 2 MMT.

--provided by Brugler Marketing & Management

Wheat futures are mostly 3 to 4 cents lower this morning. They were steady to 4 cents higher in the MPLS and CBT front months on Friday, while KC was steady to 2 1/2 cents lower. The WASDE report saw US wheat carryout up 36 mbu to 1.01 bbu. That mainly came from cuts to the feed and residual number, with the quarterly stocks updated showing larger wheat stockpiles. The Grain Stocks report indicated that 1.999 bbu of wheat was in on-farm and off-farm storage on Dec 1. That was up 126 mbu from the same time last year. World ending stocks were seen down 0.57 MMT from December @ 267.53 MMT. The Winter Wheat seedings report showed that 31.29 million acres were planted this fall, down 1.31 million from last year. That included 22.2 mill ac of HRW, 5.66 mac SRW and 3.44 mac of white winter wheat. Egypt’s GASC purchased a total of 300,000 MT of wheat in their tender on Friday including some from the US.

--provided by Brugler Marketing & Management

Live cattle futures settled with 42.5 cent to $1.075 gains on Friday, with Feb closing a dime off the high. Feeder cattle futures were up 57.5 cents to $1.025. The CME feeder cattle index was down 12 cents on February 7 at $141.69. Wholesale boxed beef prices were lower on Friday afternoon. Choice boxes were down $1.36 at $215.35 with Select 36 cents lower at $211.17. Weekly USDA estimated FI cattle slaughter was 614,000 head. That is up 21,000 head from last week and 25,000 larger than the same week last year. A few cash sales were reported at $125 on Friday. USDA trimmed 2018 beef production by 75 million pounds to 26.864 billion. Production for 2019 was also revised lower by 175 million pounds to 27.61 billion.

Lean Hog futures closed the Friday session with most contracts another 22.5 cents to $1.175 lower. The CME Lean Hog Index was down 27 cents from the previous day @ $56.89 on February 6. The USDA pork carcass cutout value was down 29 cents on Friday afternoon at an average weighted price of $64.82. The national base cash hog carcass value was down 13 cents, with a weighted average of $49.43. USDA estimated FI hog slaughter for the week at 2.516 million head including Saturday. That is well above the previous week and the same week last year. The 2018 US full year pork production number was increased by 10 million lbs to 26.32 billion in the Friday WASDE report.

--provided by Brugler Marketing & Management

Cotton futures are trading 7 to 19 points lower this morning. They saw 23 to 30 point losses in most contracts on Friday. The USDA cotton production saw a yield drop of 22 pounds/ac to 838. An increase of 160,000 harvested acres meant production dropped only ~200,000 bales to 18.390 million bales. The US carryout projection was down 100,000 bales to 4.3 million bales. On the world side, ending stocks were up 1.31 million bales to 75.5 million, as Chinese supply was revised higher on lower consumption. Friday’s Cotton Ginnings report indicated that 16.663 million RB of cotton has been ginned this MY, with 15.993 million RB of that upland cotton. A delayed CFTC report through January 8 showed speculative money managers net short for the first time since April 2016. The Cotlook A Index was up 20 points on February 7 to 82.85 cents/lb. The USDA Adjusted World Price is 64.61 cents/lb through Thursday.

--provided by Brugler Marketing & Management

Market Commentary provided by:

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