Ag Market Commentary
Corn futures are trading 1 to 1 cents lower to start the week, following last weeks’ rollercoaster ride. On Friday, they gained 4 to 6 3/4 cents on profit taking after a nasty sell off. Sep corn lost 4.14% for the week. According to trade reports, Planalytics now projects the US corn yield at 165.3 bpa, down 1.3 bpa from their previous estimate. On the other hand, forecasts show northern IA and southern MN getting 2-3 inches of rain this week. Friday’s CTFC data shows managed money making a huge shift of 147,679 contracts for the week ending July 11. Their position switched from net short to a net long position of 100,964 contracts in corn futures and options trading. They likely exited a chunk of those positions on Thursday. China sold an additional 2.6 MMT of 2014 corn in an auction of state reserves that had 2.99 MMT of corn offered on Friday.

Soybean futures are 3 to 4 cents higher this morning. They closed Friday with most contracts 13 1/2 to 14 1/2 cents higher, as July expired at $9.85 1/4. New front month Aug was down 7.14% for the week. July 17 soy meal expired $5.50 higher at $322.30, as soy oil was up 5 points to finish at 33.06. As anticipated, the USDA reported private export sales of 1.3 MMT to China for the 17/18 marketing year on Friday through their daily system. As with corn, spec funds switched their position from short to long in soybean futures and options trading ahead of the crop report. They held a net long position of 19,048 contracts on July 11. That was a jump of 89,264 contracts in the reporting week ending last Tuesday. Ahead of this morning’s NOPA report, analysts are expecting June crush at 143.093 million bushels, as soy oil stocks for June 30 are seen at 1.714 billion pounds.

Wheat futures are 3 to 4 cents lower in KC HRW futures and 3 to 4 cents higher in the MPLS spring wheat contract. Chicago SRW is caught in the middle, down 2 cents. KC and CBT were lower in most contracts on Friday, while MPLS was steady to 8 1/2 cents higher. The Sept KC HRW contract was down 5.43% on the week, as the MPLS and CBT Sept contracts were down 1.2% and 1.14%. In CBT wheat futures and options trading, spec traders added 26,682 contracts to their CFTC net long position, taking it to +44,685 contracts ahead of the USDA reports. Managed money added 18,185 contracts to their net long position in KC wheat futures and options. Their net long position was at 73,111 contracts last Tuesday. Argentina’s wheat harvest is 79.1% complete, according to the BAGE. They also lowered their planting acreage number to 13.34 million acres, from 13.59 million acres.

Live cattle futures were 37.5 to 77.5 cents higher in most contracts on Friday. Aug was up 2.64% on stronger cash trade last week. Feeder cattle futures were up $1.10 to $2.575 to end the week that saw Aug climb 6.38% higher. Cheaper feed was a big part of that move. The CME feeder cattle index was down $1 on July 13 to $150.74. Wholesale beef prices were lower in the Friday afternoon report, with choice boxes down 50 cents at $209.35. Select was $1.84 lower, with an average of $195.42. Estimated weekly FI cattle slaughter was 637,000 head, 39,000 above the same week last year. Cash sales last week ranged from $119 to $120 across most regions. Managed money traders backed off their net long position in live cattle futures and options to a net position of +114,911 contracts in the CFTC COT report.

Lean hog futures closed Friday trade with 15 cent to $2.625 losses, ahead of July’s expiration. July futures expire today and need to stick close to where they think the index will be. The CME Lean Hog Index for 7/12 was 9 cents higher than the previous day at $92.84. The USDA pork carcass cutout value was 81 cents higher in the Friday afternoon report, with a weighted average of $104.48. The national base hog carcass price was 40 cents lower with a weighted average of $86.40 in Friday afternoon’s report. Weekly FI hog slaughter was estimated at 2,202,000 head, 81,000 more than the same week in 2016. Spec traders added to their net long position in lean hogs futures and options for the 11th week in a row to 84,189 contracts as of Tuesday July 11.

Cotton futures are 7 to 44 points higher this morning. They saw mixed trade on Friday, as the front months were 21 to 64 points in the green with back months lower. The lightly traded Oct contract lost 3.68% on the week. The new weekly AWP is 65.47 cents/lb, an increase of 14 points from the previous week. The CFTC reported cotton futures and options spec traders had reduced their net long position to 22,510 contracts in the COT report. Friday saw sales of 18,700 MT of cotton from state reserves in China, as 29,900 MT were offered.

Market Commentary provided by:

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