AgriCharts Market Commentary

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Corn futures are trading steady to slightly lower this morning. The weekly export sales report from USDA had new bookings at 1.08 MMT, a pace high enough to meet USDA forecasts but less than some had hoped for.  After a brief respite, the dollar resumed its strengthening, making US commodities more expensive to offshore buyers.


Soybean futures are currently steady to slightly higher with the August contract up as much as 3 3/4 after small losses on Thursday.  Weekly export sales totaled 909,000 MT, including 548,900 MT in fresh bookings to China, and new-crop sales to Japan amounting to 20,800 MT.  Chinese weekly buying continues to be larger than cancelations.  While the EPA denied that the new rule on importing Argentine biodiesel would result in many additional imports, the soy oil market was down sharply anyway. Brazilian soybean harvest is estimated to be 6% completed.  AgroConsult is projecting a 94 MMT crop, lower than the recent estimates from USDA and CONAB but still a record.


Wheat futures are trading mostly 2 to 4 cents higher this morning after higher closes on Thursday. The US drought monitor showed abnormally dry conditions expanding in some of the major winter wheat production areas, and the unusually warm temperatures favor more plants breaking dormancy.  USDA weekly net export sales for the week ending January 22 were 565,400 MT, the largest weekly total reported since September 4, 2014.  Saudi Arabia is tendering for 660,000 MT of wheat from optional origins.


Cattle futures were lower yesterday despite indications that early week cash cattle trade was not indicative of the trend for the week. Light cash cattle trade was being reported Thursday at $159-160, with more volume asking $161. Northern bids are in the $252 area but the asks are $258-260.  Wholesale beef prices were lower yesterday, with Choice boxes averaging $244.59, down $2.70 on the day, and Select boxes off $2 at $238.34.

Lean Hogs

Lean hog futures were lower on Thursday, and gave back a big chunk of the rally from Wednesday.  April kept a lot more of the gain than did February.  The average pork carcass cutout value is $78.30, down $2.03 on Thursday after a disappointing weekly export sales report and large slaughter numbers. USDA estimated week to date slaughter is 1.72  million head, 1.36%  above a week earlier and just shy of 10% above a year ago. Iowa/Mnnesota live-basis cash prices are reported at $67.45, up a penny. Western Corn Belt prices rose 36 cents to $67.38, and Eastern Corn prices were not reported today.  The CME lean hog index stands at $72.14, down 37 cents from the previous two-day average but still well above the futures.


Cotton futures are trading22 to 34 points lower this morning.  All cotton export commitments soared over the past three weeks to 9.162 million RB, 94% of the USDA estimate for the marketing year. At 546,174 bales, the net sales figure this morning was up 16% from last week, with another 12,600 RB booked for 2015/16.  US unemployment is the lowest since 2008, suggesting more buying power. On the other hand, what is bought might be imported because of the strong dollar. New certified cotton stocks continue to be added, with 1,257 yesterday, bringing the total stocks to 58,580 and more than 3,500 awaiting review.  USDA put the AWP for this week at only 44.99 despite the rally on Wednesday. The LDP through Feb 5 will be 7.01 cents.

Market Commentary provided by:

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