Ag Market Commentary

Corn futures are 2 to 3 cents higher this morning after rising 3 to 5 1/2 cents on Tuesday. There was some net new buying on Tuesday, with preliminary open interest rising 9,952 contracts. The national average corn basis from cmdtyView is 28 cents under Dec, which is the strongest since the roll to Dec futures. Barchart released their cmdtyView corn yield forecast of 178.2 bpa; that is down from 178.43 bpa in September. A Bloomberg survey has US average corn yield dropping to 177.9 bpa in Friday’s report. The average trade estimate for production is 14.823 bbu, with estimates between 14.638 and 15.030. Traders expect USDA to show corn ending stocks at 2.120 bbu. That would be down 383 mbu from September if realized. Census data had August corn export shipments at 178.7 mbu. That puts the 2019/20 MY total at 1.776 billion, with official census data. The September WASDE had 1.765 billion bushels. Those 2019/20 corn exports were the weakest since the 2012/13 MY. Corn exports to China in August was the largest for any month on record to that destination. The total 2019/20 corn exports to the PRC were 164.9 mbu, which was the largest since the 2011/2012 MY. --- provided by Brugler Marketing & Management



Bean futures are 5 to 6 cents higher this morning. The soy complex was solidly in the black yesterday. Meal was the strongest on the day with 2.14% to 3.11% gains. Soybeans closed with double digit gains through May ’21 contracts, with Nov up 2.2% on the day. Preliminary open interest data shows net new buying interest, with soybean OI rising 7,987 contracts. Soybean oil futures closed 48 to 53 points higher. The national average soybean basis from cmdtyView is 53 cents under November for 10/6. The October cmdtyView yield forecast is still 50.5 bpa for 2020/21 beans. The trade average yield guess in a Bloomberg survey is 51.7 bpa vs. the September USDA estimate of 51.9. On average, analysts are looking for USDA to show soy production at 4.288 bbu. That would be down 25 mbu from Sept if realized. USDA will factor September frost/freeze damage into this report, as it occurred too late to be in the September edition. Official August bean export data from Census was 167.21 mbu. That left the MY total at 1.676 bbu. The Sept WASDE estimated 2019/20 soybean exports at 1.680 bbu. China was the destination for 35.52% of the MY’s shipments. That is up from 28% in 2018/29, but below the pre trade war 10-yr average of 55%.--- provided by Brugler Marketing & Management



Wheat is trading 3 to 7 cents higher this morning, led again by KC HRW. Wheat futures closed off their highs, but still maintained comfortable gains on Tuesday. KC HRW futures were the strongest, closing with double digit gains through May ’21. SRW closed 6 3/4 to 8 1/2 cents higher in the front months. MGE spring wheat ended the day up by 1 to 2 3/4 cents. August wheat exports from Census were 2.555 MMT or 93.88 mbu. That was 8% higher month to month, but 0.85% below August ’19. Official exports through the first quarter of the MY were a 3-yr high 265 mbu. August wheat exports to China were the largest since the 2013/14 MY. For the MYTD 610,453 MT of wheat has been shipped to China. The trade is looking for USDA to show between 830 and 917 mbu for the October ending stocks forecast. USDA’s monthly Supply and demand estimates are to be released on Friday. Analysts are also expecting a 2.2 MMT reduction for world stocks in that report despite a larger Russian production number. --- provided by Brugler Marketing & Management



Fat cattle futures ended the Tuesday session with gains through the Feb contracts. The deferred months were 15 to 25 cents weaker. Feeder cattle futures closed the Tuesday session with triple digit losses of at least $1.92. The 10/05 Feeder Cattle Index from CME was 36 cents higher at $143.10. There was some light $107 trade reported in the WCB, but not enough to establish a trend for this week’s sales. The FCE auction show list has 470 head. Wholesale boxed beef prices were weaker on Tuesday. Choice boxes were $216.24, down $0.74, and Select boxes were down by $1.17. USDA estimates Tuesday cattle slaughter under federal inspection at 120,000. The week’s slaughter is estimated at 236,000 head, which is even with last year’s pace. --- provided by Brugler Marketing & Management



Lean hog futures rallied triple digits (October and Dec), and closed a nickel to 77 cents higher in the back months. The CME Lean Hog Index was $77.26 on 10/02, up 45 cents. USDA’s National Average Base Hog price was $0.47 lower on Tuesday afternoon at $64.08. The WCB regional base hog price was $63.77. Census data conversions have pork exports at 527m lbs for August. That is down 5% from July, but an all time record for August. Every month since June ’19 has set or reset it’s respective month’s record. USDA’s National Pork Carcass Cutout value was $92.55 after a $2.45 drop. The primal cuts were mostly higher, but hams dropped $16.54 cwt. to $67.34. USDA estimates Tuesday’s FI hog slaughter at 487,000 head. The week to date running total is 976,000 head, which is up 2k wk/wk and 3k yr/yr. --- provided by Brugler Marketing & Management



Cotton is currently 43 to 60 points higher. Front month cotton futures closed the session with 61 to 83 point gains. Hurricane Delta is currently on track to hit the mainland by Saturday, with Delta crops in the crosshairs. August Census data showed the first month for 2020/21 cotton shipments was 1.424m bales. That is the second highest on record for the month, just 48.8k bales below the all-time high in August ’07. Monday sales on the online cotton trading platform The Seam were 8,413 bales at an average gross price of 61.55 cents/lb. The Daily Spot Cotton Quotations report from USDA showed 3,188 bales sold on Tuesday (mostly W. TX) for an average gross price of 61.22 cents. ICE certified stocks were 1,100 bales higher with 17,875 on 10/05. The Cotlook A index for 10/05 was firm at 71.30 cents/lb. The week’s AWP for cotton is 50.67 cents/lb. The LDP is 1.33 cents through Thursday. --- provided by Brugler Marketing & Management






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