Ag Market Commentary

March corn options expired today, with corn futures 1 1/2 to 2 cents lower at the closing bell. In the CoT report, managed money was 14.74% less net short wk/wk to 61,461 contracts. Managed money OI was 33,207 contracts higher to 441,903. The Export Sales report this morning showed 1.249 MMT of corn was sold for the week ending 02/13. That was slightly higher than the average estimate prior to the report, and 28.9% higher wk/wk. Corn bookings for the week were 24.3% higher than the same week last year. MYTD corn shipments are now at 12.651 MMT which lags last year by 48.90%. From the same report new crop corn bookings were 1,016 MT, which was below the pre-report expected range. USDA released initial 20/21 projection in their Ag Outlook Forum on Friday showing corn used for ethanol at 5.45 bbu, which would be the highest since 2017/18. Forecasted corn exports for 2020/21 are estimated at 2.1 bbu, also the highest since 2017/18. The forecasted yr/yr change in use (670 mbu), would not offset the increase in supply (1,415 mbu), which has forecasted ending stocks of 2.637 bbu (up 745 mbu yr/yr).

Mar 20 Corn closed at $3.77, down 1 1/2 cents,

May 20 Corn closed at $3.80 3/4, down 2 cents,

Jul 20 Corn closed at $3.83 1/2, down 2 cents,

Sep 20 Corn closed at $3.82, down 2 cents,

--- provided by Brugler Marketing & Management

Soybean options expired, with futures having posted 3/4 to 2 1/4 cent losses in the front months. March beans were the weakest on Friday and ended the week 3 1/4 cents lower than last Friday’s close. March meal futures were $3.70/ton lower on Friday which pushed futures negative on the week. Soybean oil was 52 points higher on Friday, for a 7 point gain wk/wk. The CFTC’s weekly update showed soybean spec traders were less net short on 02/18, with managed money OI lower. Soybean meal spec traders expanded their largest net short on record. The weekly Export Sales report from USDA showed 494,277 MT of soybean bookings on the week ending 02/13. That was below the estimated range, and 13.3% lower wk/wk. New crop soybean sales were 3,360 MT for the same week. Weekly shipments from the report were 957,812 MT, which was 5.4% higher than the same week last year. MYTD soybean exports total 28.406 MMT, which is 21.9% above than last year’s pace. Soybean sales to China totaled 11,484 MT or only 2.32% of total bean bookings. Soybean meal sales from the one-day delayed report were 169,433 MT which was also below the expected range. Soybean oil sales were on the high end of expectations, with 41,954 MT of soy oil bookings on the week. US soybean carry over for 2020/21 is expected to be 320 mbu according to the USDA Ag Outlook Forum data, that is the lowest since 2016/17 if realized and lifted the USDA preliminary avg cash price to $8.80/bu.

Mar 20 Soybeans closed at $8.90 1/2, down 2 1/4 cents,

May 20 Soybeans closed at $8.99, down 2 cents,

Jul 20 Soybeans closed at $9.09 3/4, down 1 1/4 cents,

Aug 20 Soybeans closed at $9.13, down 3/4 cent,

Mar 20 Soybean Meal closed at $289.20, down $3.70

Mar 20 Soybean Oil closed at $30.64, up $0.52

--- provided by Brugler Marketing & Management

March wheat options expired on Friday. Chicago SRW futures closed 9 cents lower on Friday, but that didn’t erase the week’s gains as CBT wheat finished 8 1/4 cents higher wk/wk. Kansas City wheat was 5 1/4 cents lower at but gained 2 3/4 cents wk/wk. March HRS futures were 3 1/2 cents lower, which erased most of the week’s progress as futures were 1/2 a cent/bu lower wk/wk. The USDA listed 2020/21 wheat production of 1.836 bbu at their annual Ag Outlook Forum, the lowest level since 06/07 MY. USDA’s estimate for 20/21 ending stocks of 777 mbu, would be the lowest carryout since the 14/15 MY. The CoT report Friday afternoon showed that Chicago wheat spec traders expanded their net long 40.87% wk/wk to 64,715 contracts. Managed money was net long 14,312 HRW contracts as of 02/18. Spring wheat spec traders expanded their net short to an 8-week high 11,891 contracts. USDA’s Export Sales report from the week ending 02/13 indicated 346,290 MT of old crop wheat sales. Wheat shipments from the report were 595,345 M, which was 40.61% higher yr/yr, and put MYTD exports at 17.210 MMT. Accumulated wheat exports remain steadily 14.84% above last year’s pace. Taiwan purchased 102,525 MT of US wheat in their recent tender.

Mar 20 CBOT Wheat closed at $5.51, down 9 cents,

Mar 20 KCBT Wheat closed at $4.68 1/2, down 5 1/4 cents,

Mar 20 MGEX Wheat closed at $5.26, down 3 1/2 cents,

---provided by Brugler Marketing & Management

Live cattle futures ended the Friday session with $0.37 to $0.90 losses in the front months. April cattle were $1.10 lower wk/wk. Front month feeder cattle futures ended 42 to 72 cents lower. Friday’s action dipped into but did not erase the $1.67 gain wk/wk in March feeder futures. The CME Feeder Cattle Index for 02/20 was 13 cents higher to $142.08. The delayed Export Sales report showed 19,387 MT of beef was sold in the week ending 02/13. That is 10.83% higher wk/wk, and 29.11% higher than the same week last year. Beef exports through 2020 total 109,694 MT, which is 47.25% higher than last year’s pace. USDA CoF report this afternoon showed 11.928 million head (+2.16% yr/yr) on Feed on Feb 1, which was below the average estimate ahead of the report. Marketings in January were 1.931m head (+1.1% yr/yr), which was more than expected. Placements in January were lower yr/yr at1.955m head (-0.61%), which was 42,000 head below market expectations. Commitment of Traders data from 02/18 showed cattle spec traders were 32,067 contracts net long. Wholesale boxed beef prices were higher on Friday, but widened the Chc/Sel spread. Choice boxes were 59 cents higher, while Select boxes were up by a dime. USDA reported light sales in the WCB at the $120 mark. Cattle slaughter under federal inspection for the week through Saturday is estimated at 628,000 head, which was 8,000 below last week’s FI slaughter.

Feb 20 Cattle closed at $119.725, down $0.375,

Apr 20 Cattle closed at $118.250, down $0.900,

Jun 20 Cattle closed at $110.275, down $0.650,

Mar 20 Feeder Cattle closed at $140.200, down $0.600

Apr 20 Feeder Cattle closed at $142.100, down $0.425

May 20 Feeder Cattle closed at $142.850, down $0.725

---provided by Brugler Marketing & Management

Lean hog futures rallied back from midday lows and finished mixed. The April futures were 15 cents higher at the closing bell, with a weekly move of $2.72 higher, while the deferred contracts closed with losses on Friday. The CME Lean Hog Index was $0.24 higher to $55.78. The CFTC commitment of Traders report showed that managed money had expanded their net long position to the largest in 14 weeks. The 3,712-contract expansion was from more new buying than new selling. In USDA’s weekly update to export sales, 23,747 MT of pork were sold on the week ending 02/13. That is 16.2% more than the same week last year. A total 42,193 MT of pork was exported through the same week, which put YTD shipments at 259,453 MT. Of the week’s total sales, 13.0% were to China, so far this year China averages 3,352 MT or 10.89% of the net new sales. Shipments for 2020 to the PRC total 37.41% of US pork exports. USDA noted in their Ag Outlook summary, that pork exports in 2019 were up 8% yr/yr, with the forecasted 2020 exports expected to grow an additional 17% to 7.38 billion lbs. USDA’s Pork Carcass Cutout value was 56 cents higher in the afternoon update, to $65. The National Average Base Hog price was down 8 cents, at $49.70 on Friday afternoon. USDA estimated FI hog slaughter through Saturday at 2.622 million head. That is 26,000 head more than last week’s slaughter on a stronger Saturday.

Apr 20 Hogs closed at $67.025, up $0.150,

May 20 Hogs closed at $74.025, down $0.450

Jun 20 Hogs closed at $81.850, down $0.100

---provided by Brugler Marketing & Management

Cotton futures moved 37 to 40 points lower in the deferred contracts, while March cotton closed Friday’s session with an 18 point gain. March futures were up 146 points wk/wk. CFTC data from 02/18 showed that managed money was 31,429 contracts net long in cotton, which was 7.23% lower wk/wk. The USDA released Export Sales data for the week ending 02/13, showing 235,302 RBs of upland cotton sold on the week. That is 32.94% lower than last week’s sales, but 44.48% higher than the same week last year. The report also showed 141,240 RBs of new crop cotton were sold on the same week, which is 425.08% more than the same week last year. the Export Sales report had upland cotton shipments for the week ending 02/13 at 357,681 RBs to put MYTD shipments at 6.243m RBs. That is 1.239m RBs (or 24.76%) more than this time last year. China was the destination for 46,365 RBs, or 12.34% of the total. Accumulated shipments to the PRC are 710,359 RBs, which is 32.64% higher than last year’s pace, the country accounts for 11.38% of total MYTD exports. The USDA Ag Outlook data noted a 2.5m bale reduction to world cotton stocks in the 20/21 MY, citing larger growth in global consumption relative to production growth. The Cotlook A index for 02/20 was up 80 points to 78.30 cents/lb. The FSA weekly updated AWP for cotton was updated to 59.03 cents/lb,

Mar 20 Cotton closed at 68.93, up 18 points,

May 20 Cotton closed at 69, down 37 points

Jul 20 Cotton closed at 69.84, down 40 points

Oct 20 Cotton closed at 69.24, down 40 points

---provided by Brugler Marketing & Management

Market Commentary provided by:

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