AgriCharts Market Commentary
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Corn futures ended the day with most contracts about 2 cents lower. Sharp losses in the wheat market again today were a drag on prices. July futures lost 8.5 cents or 2.42% on the week. December came within a penny of its October low yesterday, but traded nearly a dime above that level during the session today. EPA made a long awaited announcement on the Renewable Fuels Standards mandate this morning, officially increasing the yr/yr requirements for bio-fuels use. It puts a solid foundation under corn use for ethanol figures, but the market has already been operating at near record weekly production levels during 2015 without the mandate. Weekly data from the CFTC on the Commitments of traders showed managed money accounts adding 5,703 contracts, or about 4.23% to their net short position from Tuesday to Tuesday.
Soybean futures posted gains of 3 to 8 cents on the day, getting support from an updated biofuels mandate from the EPA announced this morning that gave bean oil futures a huge boost. July bean oil futures were up $1.27 on the day. Mandated biodiesel use is at higher levels than in the previous proposal. Weekly USDA export sales figures showed that old crop soybean sales continue to accumulate, but new crop sales were relatively light. Private exporters reported to the USDA another 202,000 MT of new crop soybean export sales which were announced this morning under the daily reporting system. According to the CFTC, managed money accounts held a new record large net short position in soybeans as of the Tuesday close.
Wheat futures posted another day of double digit losses for all three classes. The respective front months lost 7 to 9.5% on the week. Improvements to questionable weather in both the US and other areas of the world combined with a higher dollar and weak export prospects to put significant pressure prices. Old crop export sales in the weekly USDA report for the week ending May 21 were just 42,500 MT, and the accumulated commitments for the marketing year are about 1.48 million MT shy of the USDA projection with only about 1.5 weeks worth of reporting left in the period as the wheat marketing year ends on May 31. As of last Tuesday, the managed money accounts were shown to be adding to their net short position in SRW futures and options, but reported a net long position of 4,722 contracts in HRW wheat. That cost them as the week unfolded.
Live cattle futures posted triple digit losses on the session. Feeders were also solidly into the red with August futures losing $2/cwt. Weekend/month-end profit taking was a factor. Both were higher on the week. Wholesale beef prices were sharply lower today on 145 loads. Choice boxes lost $4.26 and select boxes averaged $2.91 lower. USDA reported net weekly beef export sales were a new high for the marketing year at 20,800 MT with South Korea and Hong Kong companies buying the most this week. Cash cattle trade did start to develop at $159-160 on Friday afternoon. CFTC showed managed money accounts had backed off about 1% on their net long position in cattle from Tuesday to Tuesday.
Lean hog futures were lower on the day. July through October lost more than a dollar, but June hogs only lost 77.5 cents on the session to settle at $83.825, up a dime for the week. The CME Lean Hog Index was down 31 cents at $82.20. National average pork carcass cutout values were up $2.17 in the afternoon USDA report. Cash hog base prices were 66 cents lower in the ECB and $1.68 lower in the WCB, with no comp for the IA/MN area. Estimated week to date hog slaughter including Saturday is 1.856 million head, compared to 1.743 million head for the same period a year ago. Managed money accounts took 9.8% off their net long position in lean hogs from Tuesday to Tuesday, but are still net long 26,701 contracts.
Cotton futures settled mixed on the day. The USD is lower on the session and crude oil futures are nearly $2 higher. Cert stocks are currently at 124,606 bales, with another 2,386 bales added and another 14,808 awaiting review. This morning, USDA showed total cotton export sales for last week of 197,200 running bales, including 22,400 RB of pima. Old crop sales of upland cotton were 117,500 RB. The Cotlook A Index was 20 lower at 71.05, while the Forward A was UNCH at 74.05. The net-long position in cotton held by the managed money accounts shrank during the week ending Tuesday May 26 by approximately 34.7% from the previous week.