Ag Market Commentary

Corn futures are trading 2 to 3 cents lower this morning. Dec Corn lost 12 cents last week, but futures did ride into the weekend on Friday gains of 2 cents or more. The NASS Crop Production report showed a 1.4 bpa reduction to the 2019 corn yield projection, taking it to 167 bpa. That dropped production to 13.661 billion bushels, down 118 mbu from Oct. Expected US ending stocks were cut 19 mbu to 1.910 bbu as demand was also lowered. Exports, feed use and ethanol use were all reduced. USDA bumped up the expected average cash corn price for the year by 5 cents to $3.85. The world corn carryout was cut 6.64 MMT from last month to 295.96 MMT. The Commitment of Traders report on Friday afternoon showed that managed money was still increasing their net short for Corn futures, growing that position to 104,846 contracts as of November 5. Trade ideas for US corn harvest are running 65-66% completed. USDA won’t release those numbers until Tuesday because of the Veteran’s Day holiday.

---provided by Brugler Marketing & Management

Soybean futures are 5 to 7 cents lower this morning. They lost as much as 5 1/2 cents in the nearby contracts on Friday, with nearby November down 4 ¾ for the full week. Soybean meal finished Friday $0.70 /ton lower. The NASS Crop Production report left the 2019 bean yield projection at 46.9 bpa and producers remained more optimistic than expected about harvesting acreage hit by snow in October. The USDA left production at 3.550 billion bushels. US ending stocks were raised 15 mbu in the report due to a lower projected crush, and they are now projected at 475 bbu. World bean carryout was above what analysts anticipated, bumped up 2.2 MMT from last month to 95.42 MMT. The Commitment of Traders report Friday afternoon showed that managed money’s net long position for soybean futures shrank by 19.2% in the week ending 11/5. Trade ideas for US harvest progress are in the 84-85% range for Tuesday’s weekly report.

--- provided by Brugler Marketing & Management

The three wheat markets are 2 to 5 cents lower this Veterans Day morning, with Chicago SRW the weakest and Minneapolis the firmest of the three. MPLS futures were fractionally mixed on Friday. KC lost 2 to 3 ¼, and Chicago was down ¼ to 3 cents. HRS wheat finished the week 13 cents lower. The WASDE report had a 29 mbu reduction in US ending stocks, which are now seen at 1.014 bbu. USDA cut harvested acres by 900,000 after the re-survey. World Wheat ending stocks were bumped up 0.42 MMT over last month to 288.28 MMT. Australian and US production were cut, but other countries like the EU and Russia were increased. The CFTC commitment of traders report showed that managed money flipped their Chicago wheat position back to net short after a two week try at the bull side. They grew their net short with KC wheat, and in MLPS the spec funds were still net short 9,044 contracts as of 11/5.

-- provided by Brugler Marketing & Management

Live cattle futures were 5 to 32 higher on Friday, with June the firmest. The weekly change was modest at +22 1/2 cents. Nov feeder cattle dropped $2.15 over the week, with nearby futures closing Friday with gains of 10 to 22 cents. The 11/06 CME Feeder Cattle index was down 17 cents to $146.09. The WASDE indicated that US 4th quarter beef production would be 88 million lbs higher than October’s projection, forecasted to bring the yearly production to 27,036 million lbs (about 1% above last year). Wholesale boxed beef prices continue to increase. Choice boxes are up another $0.83 to $239.12, and select boxes gained $0.24 on Friday to close at $213.26. Cash cattle trades reported to the USDA were at $115 in TX, $114 for KS, and as high as $117 for the WCB on Friday. Nebraska also saw some Friday dressed sales of $181. CFTC reported that as of Tuesday, managed money was net long for live cattle futures by the largest amount since May. They were also net long feeder cattle futures (by 91 contracts), the first time managed money traders had been bullish as a group since April. The USDA estimated weekly cattle slaughter was 651,000 head.

--provided by Brugler Marketing & Management

Lean hog futures posted increases of 12 to 17 cents for the upcoming Feb and Apr contracts on Friday. Nearby Dec futures finished 17 cents lower, carrying a 32 1/2 cents loss on the week. Managed money spec funds were net long 13,258 contracts as of 11/5, a 4.2% reduction from last week. The 11/06 CME Lean Hog Index regained $0.03 to $60.19. USDA’s pork carcass cutout value was $2.03 higher on Friday, with ham up the most @ $5.12 per hundred pounds. The national average base hog price was down 39 cents, closing the week at $44.95. The WASDE report updated 4th quarter pork production estimates to 7.46 billion lbs to bring the 2019 production to a record 27.620 billion lbs. The USDA estimated weekly FI hog slaughter was 2.693 million head including the Saturday estimate.

--provided by Brugler Marketing & Management

Cotton futures are trading 61 to 82 points lower this morning in “buy the rumor, sell the fact” action following the USDA reports. The dollar is weaker vs. the Japanese yen, and the Hong Kong stock market is sharply lower. They posted gains of 16 to 31 points on Friday, helping to push the wk/wk gains to 49 points in nearby Dec. The Cotton Ginnings report showed that the MY total cotton ginned is up to 6.249 million (480-lb) bales. Cotton yield was down 34 to 799 lbs per acre in the Crop Production report, 7.5% lower than last year. The ending stocks estimate was reduced to 6.1 million bales from 7 million in the October WASDE report. USDA’s world cotton ending stocks figure tightened to 80.8 million bales from 83.69 million in October. Managed money spec funds expanded their CFTC net short position for cotton by 150% wk/wk, and as of 11/5 they were net short 15,247 contracts of futures and options. The Cotlook A Index for 11/7 was down by 25 points, to 74.70 cents/lb. The AWP is now 56.63 cents/lb through Thursday.

--provided by Brugler Marketing & Management

Market Commentary provided by:

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