Ag Market Commentary

Corn futures are mostly 2 1/2 to 2 3/4 higher this morning as weekend rains in Argentina were limited. They saw most contracts 2 to 3 3/4 cents lower on Friday, with nearby March eking out a 1/2 cent gain on the week. A report showed that China canceled 4 cargoes of US corn in January, as they look to source non-GMO corn for processing. They switched those cargoes to Ukraine origin, a country that does not use GMOs. Spec traders in corn futures and options reduced their net short position by 48,018 contracts during the week of Feb 6. That CFTC position was at -82,924 contracts on Tuesday. South Korea purchased 202,000 MT of corn on Friday, with the origin likely the US or South America.

Soybean futures are currently 10 to 13 1/2 cents higher after settling the Friday session with most contracts 3 to 5 cents higher. Moisture in Argentina over the weekend was less than expected and there may also be some stock market cash trying to find a home. Meal futures were up $2.10/ton, with nearby soy oil 25 points lower. Nearby March soy meal gained 3.74% on the week over concerns of the Argentine soybean crop. This afternoon’s CFTC Commitment of Traders report indicated that money managers were net short 9,978 contracts as of Feb 6. That is an +11,871 contract move from the previous week. AgRural estimates that the Brazilian soybean crop is now 10% harvested, lagging last year’s 19% and the average of 12%. Most of the progress has been made in the state of Mato Grosso, at 30% complete, with Parana only 1% harvested vs. the average of 16%. Some catch up is expected in Parana this week. Yields in Mato Grosso have been excellent according to local media.

Wheat futures are trading 4 to 7 cents higher this morning after since finishing Friday day with most contracts 7 to 9 1/2 cents in negative territory. Spec funds were shown reducing their CFTC net short position 13,369 contracts during the week of 2/6, to a net position of 83,394 contracts in CBT wheat futures and options. In KC wheat futures and options, they flipped their net position 17,054 contracts to a net long position of 15,157 contracts. That is the first time they have held a net long position since early October. Egypt’s GASC purchased 360,000 MT of wheat in their tender on Friday, with 4 cargoes sourced from Russian and 2 from Romania.

Live cattle futures ended the Friday session with most contracts 10 to 40 cents lower, as nearby Feb was 75 cents higher. Feeder cattle futures were 27.5 cents to $1.05 lower. The CME feeder cattle index was down 43 cents on February 8 at $147.59. Wholesale boxed beef values were lower on Friday afternoon. Choice boxes were down $2.01 at $206.52, with Select boxes $1.05 lower at $202.74. The Ch/Se spread had narrowed down to $3.78. Estimated FI week to date cattle slaughter is 591,000 head through Saturday. That was down 20,000 from the previous week on lighter Saturday slaughter, but 12,000 head larger than the same week last year. Cash trade was slow to develop, but some $125-126 trades were popping up late on Friday, with $200 reported in Nebraska.

Lean hog futures were 22.5 to 90 cents lower on Friday, dropping 2.69% on the week. The CME Lean Hog Index on February 7 was at $75.63, up 25 cents from the previous day. The USDA pork carcass cutout value was $2.48 lower at $74.44 in the Friday PM report. The loin and picnic cuts were the only reported higher, with the belly primal down a sharp $12.67. The national base hog weighted average price was up 22 cents at $69.72 Friday afternoon. The USDA estimated FI hog slaughter at 2,389,000 through Saturday. That is down 49,000 head from the previous week but 29,000 head more than the same time last year.

Cotton futures are trading 38 to 58 points higher this morning. They closed Friday with gains of 6 to 35 points. The US dollar index was weaker overnight, and the S&P futures were higher. The CFTC commitment of Traders report showed managed money lowering their net long position by 14,489 contracts during the week that ended 2/6. The position in cotton futures and options was at 81,887 contracts on that date. The USDA Adjusted World Price or AWP was updated to 69.45 cents/lb this morning, which was down 195 points from the previous week. The Cotlook A index on February 8 was 86.70 cents/lb, down 25 points from the previous day. The NCC grower survey released on Saturday anticipates a 3.7% increase in US all cotton acreage in 2018.

Market Commentary provided by:

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