Ag Market Commentary

Corn futures are mostly 2 to 2 cents higher this morning. They ended Wednesday with most contracts 1 to 3 cents in the red, pressured by soybeans and meal. The EIA report indicated that 1.058 million barrels per day of ethanol was produced in the week that ended 5/11. That was 18,000 bpd more than the previous week and the largest weekly production (and implied corn consumption) total since mid-February. Ethanol stocks were 21.505 million barrels, down 459,000 barrels from the previous week despite the larger production. The USDA Weekly Export Sales report this morning is expected to show 0.7-1 MMT in old crop corn sales, with 50,000-200,000 MT for new crop in the week of May 10.

Soybean futures are currently 5 to 6 cents higher after posting sharp 15 to 19 cent losses in the front months on Wednesday. The rest of the soy complex also saw weakness. Soy meal was down $5.70/ton, with front month soy oil 53 points lower. Recent weakness in the Real vs. a stronger US dollar has cheapened Brazilian soybeans on the world market. USDA weekly soybean export sales of old crop are expected to be 300,000-600,000 MT today, with new crop at 100,000-400,000 MT. Soy meal sales are seen at 100,000-300,000 MT, with 10,000-40,000 MT estimated for soy oil.

Wheat futures are trading 7 to 10 cents higher ahead of the weekly USDA Export Sales report. They settled with 4 to 5 cent gains in the HRW and HRS contracts on Wednesday, with SRW fractionally higher. Rains in the Northern Plains this week could potentially slow the already delayed spring wheat planting progress. Traders are expecting USDA to show 0-200,000 MT in old crop export sales for the week that ended May 10. There are only 3 more reporting weeks for the 17/18 MY, with weekly new crop sales projected at 100,000-300,000 MT. Taiwan purchased 83,350 MT of US wheat in a tender on Wednesday, with shipment in July/August. Those will be in next week’s report.

Live cattle futures saw losses of 70 cents to $1.45 on Wednesday. Feeder cattle futures were down 55 cents to $1.725. The CME feeder cattle index was down 25 cents on May 15 at $135.67. Wholesale boxed beef values were lower on Wednesday afternoon. Choice boxes were down 61 cents at $231.03, with Select boxes $1.01 lower at $208.50. Week to date FI cattle slaughter was estimated at 354,000 head through Wednesday. That is down 2,000 head from last week but 5,000 head larger than the same week last year. A few early cash trades were reported at $115-116 on Wednesday, down $1 from Tuesday.

Lean hog futures closed the Wednesday session with gains of 20 cents to $1.175. The CME Lean Hog Index was up 58 cents from the previous day to $65.23 on May 14 and continues to rise seasonally. The USDA pork carcass cutout value was up 15 cents at $74.39 on Wednesday afternoon. The loin was down $3.37, with all other primals higher. The national base hog weighted average price was 13 cents higher at $64.61 Wendesday afternoon. The USDA estimated FI hog slaughter at 1.38 million head through Wednesday. That is 6,000 head more than last week and 60,000 above the same week in 2017.

Cotton futures are trading 5 to 20 points lower this morning. They finished Wednesday with 44 to 106 point gains in most contracts. The Cotlook A index was up 1 cent from the previous day to 92.1 cents/lb on May 15. Much of the main cotton growing area in TX missed out on hoped for rains Tuesday evening. Analysts are expecting to see 125,000-200,000 RB in old crop sales in the weekly USDA report. The USDA Adjusted World Price for this week is 75.58 cents/lb and will be updated this afternoon. China sold 25,652 MT of cotton from state reserves on Wednesday, totaling 85.47% of the offered amount.

Market Commentary provided by:

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