Ag Market Commentary

Corn futures closed 1 to 1 3/4 lower on Friday. Losses for the week and for the full year were both less than 2 cents per bushel! That’s actually a moral victory for the bulls given larger US carryover stocks. Trader ideas for the USDA weekly Export Sales report were too conservative at 0.6-1.1 MMT, with 0-50,000 MT seen for new crop. The USDA indicated old crop corn export sales of 1.245 MMT for the week ending December 21 in this morning’s Export Sales report, with another 102,900 MT sold for 2018/19 crop delivery. The market needs a lot more weeks like that to exceed the current WASDE forecast. Argentine corn planting progress is catching up to last year at this time, although still behind the 3 year average pace. Earlier delays will result in some maturity lag unless the heat units pick up.

Mar 18 Corn closed at $3.50 3/4, down 1 1/4 cents,

May 18 Corn closed at $3.59, down 1 1/4 cents,

Jul 18 Corn closed at $3.67 1/4, down 1 3/4 cents

Sep 18 Corn closed at $3.74 3/4, down 1 3/4 cents

Soybean futures settled 2 to 6 cents higher. January soybean meal was 80 cents higher. Soy oil gained 58 points on a bullish USDA export sales week featuring 44,200 MT in new sales for the week. This morning’s USDA Export Sales report showed 17/18 soybean export sales of 974,700 MT for 2017/18 delivery, with another 81,300 MT for 2018/19. Meal sales were on the higher end of expectations at 288,300 MT and topped the 300,000 MT mark when you throw in 17,600 MT booked for next year. The CFTC Commitment of Traders report showed the spec funds adding 28,319 contracts to their net short position in the week ending December 26. That put them net short 69,091 contracts of futures and options on Tuesday night.

Jan 18 Soybeans closed at $9.51 3/4, up 6 cents,

Mar 18 Soybeans closed at $9.61 3/4, up 5 cents,

May 18 Soybeans closed at $9.73, up 5 1/4 cents,

Jul 18 Soybeans closed at $9.83 1/4, up 4 1/2 cents,

Jan 18 Soybean Meal closed at $312.60, up $0.80,

Jan 18 Soybean Oil closed at $33.08, up $0.58

Wheat futures settled to 1 higher in KC HRW today, with the market building in a modest weather premium against weekend freeze damage. Areas with little or no snow cover could be at risk of winter kill, particularly southern KS. That said, winterkill is notoriously difficult to quantify ahead of the crop breaking dormancy in February, and the Russians and Aussies have plenty available for sale. This morning, USDA indicated all wheat export sales for the week ending 12/21 were on the low side at 478,400 MT, with another 62,100 MT for 2018/19 delivery. The Commitment of Traders report showed the big manage money spec funds lightening up ahead of year end. They were still net short 145,735 contracts in CBT wheat on 12/26.

Mar 18 CBOT Wheat closed at $4.27, down 3/4 cent,

Mar 18 KCBT Wheat closed at $4.27 1/4, up 1/2 cent,

Mar 18 MGEX Wheat closed at $6.14 3/4, down 4 1/4 cents

Live cattle futures settled $.32 to $1.55 lower led by the expiring December contract as it converged with the presumed cash market. Feeder futures were 40 to 45 cents higher. The CME feeder cattle index on December 28 was up 63 to $146.51. Wholesale boxed beef values were higher for both the day and the week. Choice boxes were 62 cents on the day and $3.34/cwt for the week. Select boxes were up $2.07 on Friday and up $5.10 for the full week. Estimated weekly FI cattle slaughter was 502,000 head. That is 13,000 head fewer than the same week last year. Cash trade was slow to develop this week, with limited trade reported at $193 on Friday morning. There have still been zero deliveries against December futures, with the oldest long dating back to November 1. The USDA weekly Export Sales report showed 2017 beef export sales of 9,100 MT (to be shipped by December 31), with 9,100 MT sold for 2018.

Dec 17 Cattle closed at $123.000, down $1.550,

Feb 18 Cattle closed at $121.550, down $0.700,

Apr 18 Cattle closed at $122.425, down $0.325,

Jan 18 Feeder Cattle closed at $146.000, up $0.400

Mar 18 Feeder Cattle closed at $142.675, up $0.450

Apr 18 Feeder Cattle closed at $143.075, up $0.400

Lean hog futures gave back some money ahead of the close, settling 27 lower to 22 higher. The CME Lean Hog Index for 12/27 was down 1 cents to $61.58. The USDA pork carcass cutout value was up 19 cents at $78.22. It advanced 95 cents per cwt for the week while the CME Index was falling. That’s a nice trick for the packers. The national base hog weighted average price was 34 cents higher at $58.27. The USDA weekly FI hog slaughter was estimated at 2.107 million head. That is up 37,000 head from the same week last year. USDA reported pork export sales for 2017 of 16,600 MT this morning, with 2018 sales for the week ending December 21 at 14,400 MT. Russia has confirmed an outbreak of H5N2 avian flu, with more than 660,000 birds culled thus far as a preventative measure.

Feb 18 Hogs closed at $71.775, up $0.225,

Apr 18 Hogs closed at $75.650, down $0.050

May 18 Hogs closed at $80.000, down $0.075

Cotton futures settled mixed, with nearby March 17 lower. March futures matched their life of contract high on Thursday but backed off a bit to end the week. The weekly USDA Export Sales report was expected to slow down from last week’s 326,520 RB and it did. Weekly sales totaled 163,700 RB for upland and 12,800 RB for old crop pima. There were another 32,500 RB of upland varieties sold for 2018/19 shipment. The USDA Adjusted World Price (AWP) was increased 262 points to 70.62 cents/lb on Thursday. It is a long way above loan rate! The Cotlook A Index for the 28th was 89.60, up 1.50.

Mar 18 Cotton closed at 78.630, down 17 points,

May 18 Cotton closed at 78.960, up 8 points

Jul 18 Cotton closed at 79.240, up 19 points

Market Commentary provided by:

Brugler Marketing & Management LLC
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