AgriCharts Market Commentary

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Corn futures are trading mostly 2 cents higher this morning. They ended Friday with losses of 3 1/4 to 5 1/2 cents, with July down 6.84% Friday/Friday. The late Friday Commitment of traders report showed spec funds adding back 35,896 contracts to their net short position in a week. As of June 20 they had a net short position of -53,825 contracts in corn options and futures trading. Looking ahead to this Friday’s Grain stocks report, analysts are expecting June 1 US corn stocks at 5.125 billion bushels, with a huge range of estimates from 4.685 to 5.36 bbu. That average estimate would be an 8.79% jump over June 2016 stocks. Chinese May corn imports were a negligible 42,219 MT.


Soybean futures are 2 to 4 cents higher this morning after closing steady to 2 1/4 cents lower in the back months (as July settled positive) on Friday. On the week that contract lost 3.67%. July 17 soy meal was down 20 cents, with soy oil 6 points higher in the front month. A survey by Bloomberg shows traders projecting soybean stocks on June 1 to increase 12.73% yr/yr to 983 million bushels. Another firm puts the average at 991 million. Estimates ranged from 803 mbu to 1.119 bbu. The CFTC reported that as of last Tuesday, managed money had a net short position of -87,140 contracts. That is a 7,467 contract increase from the previous week. Data from Chinese customs shows that 9.586 MMT of soybeans were imported during May, up 25% from the previous May. Imports from the US rose 66.2% yr/yr to 1.47 MMT.


Wheat futures are 5 to 6 cents lower in the CHI and KC contracts. MPLS spring wheat is going the other way, up 3 to 7 cents in anticipation of lower crop condition ratings from USDA this afternoon. Futures posted losses in most of the KC and CBT contracts on Friday, as their respective July contracts were down on the week. MPLS was the firmest on the day, up 5 cents in the nearby contract as July was up 2.88% for the week. Spec traders in CBT futures and options posted their smallest reported net short position in 19 months of -20,971 on Tuesday, down 61,888 contracts. In KC wheat futures and options, they added 13,813 contracts for their largest reported net long position since April 2014 at 37,701 contracts. Managed money still holds 0 shorts for MPLS wheat futures and options. Analysts are estimating June 1 US wheat stocks at 1.136 bbu, up from June 2016 at 976 mbu. Bunge estimates that Argentina’s wheat production for 2017/18 will be 20MMT, with 13 MMT in exports, up 2.7 MMT from the previous year.


Live cattle futures finished with gains of 32.5 cents to $1 on Friday. Cash cattle trade fell a considerable amount last week to $119-$123. Feeder cattle futures were up $1.25 to $2.075 to end the week. The CME feeder cattle index was down $1.09 on June 22 at $147.09. Wholesale beef prices were lower in the Friday pm report, with choice boxes sharply lower, down $3.13 at $239.75. Select was down 20 cents, with an average of $216.72 Estimated weekly FI cattle slaughter was 632,000 head, 4,000 head more than last week and 24,000 head more than the same week a year ago. USDA authorized the grazing usage of CRP ground in the Dakotas and Montana for D2 and D3 drought stricken areas. After the conclusion of the trading session the USDA Cattle on Feed report showed June 1 COF at 11.096 million head, up 2.7% from June 2016. May placements were 12.18% larger the last year at 2.119 million head, with 1.951 million head being marketed in May, up 8.75% from the year prior. The placements number was larger than trade estimates and bumped up the June 1 inventory.

Lean Hogs

Lean hog futures settled with most contracts in the red 12.5 cent to $1.225, as July was up 27.5 cents on Friday and $2.975 on the week. The CME Lean Hog Index for 6/21 was up another $1.27 to $89.30. The USDA pork carcass cutout value was up $1.63 in the afternoon report, with a weighted average of $101.15. The national base hog carcass price was 29 cents lower with a weighted average of $85.85 in the afternoon report. FI hog slaughter was estimated at 2,144,000 head through Saturday, 35,000 fewer than last week and 48,000 head above last year.


New crop cotton futures are trading 8 to 11 lower this morning after higher trade on Friday. Northern Texas got 1-2” rains over the past 24 hours. Thin July is up 85 points as some of the shorts are starting to take profits. The COT report indicated managed money lowering their net long position in cotton futures and options by 23,571 contracts to a net long position of 45,344 contracts. That is the smallest net long position for the specs since July of last year. The Cotlook A index for June 22 dropped 40 points to 82.60 cents/lb. Customs data shows Chinese May imports were up a total of 8.56% since the previous May at 85,482 MT. Of that total 61.52% was from the US, as China May imports from the US rose 52.75% yr/yr.

Market Commentary provided by:

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