Ag Market Commentary

Corn futures are trading 4 to 4 cents lower this morning. They closed Friday with gains of 3 to 4 1/2 cents, although July lost 3 3/4 cents on the week. The Commitment of Traders late Friday report showed spec funds lopping 120,829 contracts off their net short position in corn options and futures trading. As of Tuesday they had a net short position of -17,929 contracts. On Friday, China sold 1.254 MMT of corn from state reserves, most of which was from 2013, with 58.5% of the total 2.144 MMT offered sold. The Buenos Aires Grain Exchange estimates that 45% of the Argentine corn crop had been harvested as of Thursday. AgRural projects that 4.5% of the safrinha corn crop in Brazil is harvested, while leaving their estimate for production of the second crop at 67.1 MMT.

Soybean futures are currently 3 to 4 cents higher after settling mostly 4 1/4 to 6 cents in the green on Friday. July 17 soy meal was up 30 cents, with soy oil 37 points higher in the front month. The CFTC reported that managed money spec funds backed off their net short position by 15,064 contracts as of June 13, to -79,673 contracts in soybean futures and option trading. The BAGE estimates that soybean producers in Argentina have harvested 94.5% of their crop. Sources at the Soybean Export Council told Reuters that the Chinese buying team due in Iowa during July could commit to buying a record quantity of soybeans (>13.4 MMT). Such a large quantity would make the currently lagging new crop commitments look a lot more bullish, even if this is a frame agreement that takes months and months to sell and ship.

Wheat futures are 1 to 2 cents higher this morning in the CHI and KC contract, and up 5 cents per bushel in MPLS spring wheat. All exchanges saw positive price moves last week, with MPLS up 5.98%. KC and CBT were up 4.87% and 4.37% in their respective July contracts. Spec traders added 21,494 contracts to their net long position in KC wheat futures and options last week. In CBT futures and options, they reduced their net short position by 23,277 contracts. Thinly traded MPLS futures and options have 0 shorts in managed money for the second week in a row, as their net long position is 11,780 contracts. Exports for the 17/18 marketing year are expected to drop 3.3% yr/yr to 50.4 MMT for combined Russian, Ukraine, and Kazakhstan shipments.

Live cattle futures posted gains of 20 to 67.5 cents in the back months Friday. June lost 7.28% on the week and was 80 cents lower on Friday. Feeder cattle futures were 42.5 to 97.5 cents in the green on Friday, after a week that saw August drop 4.09% The CME feeder cattle index was down $1.66 on June 15 at $151.07. Wholesale beef prices were mixed in the afternoon report, with choice boxes 10 cents higher at $249.84. Select was down 73 cents, with an average of $219.80. Cash sales last week were in the $130 range in the North, with $128 in the South. Estimated FI cattle slaughter through Saturday is 628,000 head, up 6,000 from last week and 22,000 head more than the same week a year ago

Lean hog futures ended mixed on Friday as July was 27.5 cents higher and back months as much as 80 cents lower. The CME Lean Hog Index for 6/14 was up another 83 cents to $82.93. The USDA pork carcass cutout value was 73 cents higher in the afternoon report, with a weighted average of $95.63. The picnic was the only primal cut lower. The national base hog carcass price was 75 cents lower with a weighted average of $84.72 in the afternoon report. Prices ranged from $79.00-$86.00. Through Saturday, week to date FI hog slaughter is estimated at 2,179,000 head, 13,000 fewer than last week but now 27,000 head above last year.

Cotton futures are trading 4 lower to 22 higher this morning after a mixed close on Friday. Nearby July saw a little light short covering overnight. July posted a loss of 5.03% on the week. The new AWP is 67.31 cents/lb through next Thursday, down 72 points from the previous week. China sold 18,900 MT of the 30,200 MT of cotton offered at an auction of state reserves on Friday. On the week they sold 91,200 MT of the 150,200 MT offered. The COT report showed managed money continuing to decrease their net long position in cotton futures and options by 11,012 contracts to 68,915 contracts as of Tuesday. This is the smallest net long position since mid-November 2016.

Market Commentary provided by:

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