AgriCharts Market Commentary
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Corn futures are trading 4 to 6 cents lower at midday. The weekly EIA report showed ethanol stocks up 500,000 barrels from the previous week, coming in at 18.3 million barrels. Ethanol production was 6 thousand barrels per day more than last week. Weekly gasoline use was very low. There were no ethanol imports. A bout of precipitation making its way across the Corn Belt today, combined with the Pro Farmer crop tour showing mostly larger than normal yields, is weighing heavily on the corn market. The US Dollar index is solidly higher again today, bringing some added pressure. The Indiana yield estimate from the tour came in well above average at 185 bpa. The Nebraska tour average corn yield was put at 163.77 bpa. Comparisons to the 3-year averages are not very valid as the 2012 drought data badly drags down the average. The August USDA yield projections for those states were 173 and 179 bpa respectively.
Soybeans are trading mostly 13 to 14 cents lower at midday. The Sept contract is firmer, now trading about 3 cents shy of even money after trading as much as 6 cents higher this morning. September options expire on Friday. Soybean meal was sharply higher yesterday, and again this morning, but has slipped into the red at midday. ABIOVE raised its projection for 2014 Brazilian soybean exports to 45 MMT from 44 MMT. This morning, USDA reported private exporters sold 110,000 MT of soybeans to Vietnam for 2014/15 delivery. In the Pro Farmer crop tour, soybean yield estimates are varied with scouts noting healthy plants overall. Pod counts are generally above year ago, but in some cases participants are noting a lot of 2 bean or immature pods.
Wheat futures are lower at midday. Lack of escalation in the Russia/Ukraine conflict has taken most of that risk premium back out of the market today. From wire reports, Ukraine is apparently slowing wheat exports while it tallies inventories of milling quality wheat to ensure domestic supplies. Only 40% of the crop is estimated to be milling quality, and of course they lost the Crimean production when it was annexed by Russia. Gulf barge bids for CIF SRW wheat jumped a nickel for Oct/Nov/Dec in the midday report and are at +85 cents vs December futures. US Spring wheat harvested yield reports are trickling in with most above average. The trade average estimate for Stats Canada Canadian wheat production is 28.5 MMT with a different survey showing 29 MMT. The report release is scheduled for Thursday morning.
Cattle futures are sharply lower on the day, recognizing some more weakness in product values and their need to stay competitive with pork cuts. The dollar continues to rally, which drives negative sentiment toward the beef export market. Feeders are also sharply lower, down $1.75 to $2.975. Choice boxes were down another $1.65/cwt in the morning USDA report, with Select product down $0.80/cwt. Cash cattle activity has been light, with some sales reported for top choice steers ranging from $151 to $155 nationwide. No dressed sales of steers have been reported, a few dressed heifers changed hands for $243 in Nebraska. The trade average guess for Friday’s Cattle on Feed report has numbers at 97.21% of year ago on August 1, with July placements down 9.5% from last year.
Hog futures are sharply lower this morning. Product values are still under pressure, with the average carcass cutout value FOB plant down $0.99 in the morning report. Picnic primals are recovering, and Bellies are firmer, but the Loin, Ham and Butt cuts are sharply lower. Estimated week to date hog slaughter at 809,000 head is up from 783,000 last week, but still 5.5% smaller than in 2013. The CME lean hog index moved $1.89 lower and is at $111.15. Eastern Corn Belt cash hogs averaged $98.31 this morning. WCB hogs are $3.58 lower than yesterday at $95.95. The IA/MN average carcass value is down $3.58, also at $95.95.
Cotton futures are trading sharply higher at midday, despite a stronger dollar index. Futures are getting some help from dry weather in key parts of Texas, with DEC14 trading at the highest levels since July 25. Cert stocks dropped another 1,459 bales to 86,690 bales as the warehouses continue to clear out old inventory ahead of harvest. India is reporting a huge crop in the offing, as the monsoon delay encouraged some switching from oilseeds to less moisture dependent cotton. Cotton planting progress has been more rapid than average. Monsoon rain totals are still about 18% below average. They have been slowly improving. The Cotlook A index is at 73.50 up 0.25 from the previous day.