Ag Market Commentary

Corn futures ended the Wednesday session with most contracts steady to a penny higher. They will resume trading at 8:30 AM CST this morning. They showed little reaction to last week’s record ethanol production (corn use >111 mbu for the week using a 2.84 gal/bu yield), as huge stocks and large US production are weighing on the market. EIA indicated a record 1.074 million barrels per day of ethanol was produced during the week of November 17. Ethanol stocks rose 400,000 barrels to 21.897 million barrels. Corn export sales during the week of 11/16 are projected to come in at 0.9 to 1.3 MMT in this morning’s USDA Weekly Export sales report, based on trade surveys.

Soybean futures closed 6 to 8 1/4 cents higher on Wednesday. December meal was up $6.10/ton, with nearby bean oil down 12 points. Trading will resume on Globex at 8:30 AM CDT after the Thanksgiving holiday. The market will also close early, with full size contracts ending at 12 PM CST and minis 15 minutes later. Canola and palm oil futures were higher in overseas markets, which could drive some unwinding of meal/oil spreads today. Rains in South America this past week missed a chunk of Argentina. The holiday delayed USDA Export Sales report is expected to show 17/18 soybean sales of 1-1.4 MMT during the week ending 11/16. There are also 0-100,000 MT estimated in 18/19 sales. Soy meal export sales are projected to run 100,000-300,000 MT, with soy oil expected at 0-22,000 MT.

Wheat futures were mixed on Wednesday, with KC higher and CBT and MPLS lower in the front months. The USDA is expected to indicate 350,000-550,000 MT in all wheat export sales for the week ending Nov 16. That report will be at 7:30 AM CST. The Bureau of Meteorology in Australia has raised odds of a La Nina pattern starting in December to 70%. That would most likely bring warmer and wetter summers to that country, giving much needed moisture to the area. It would not be a major factor for Aussie 2017 wheat, which is already being harvested. It has some implications for South American production if it sticks around long enough.

Live cattle futures posted gains of 72.5 cents to $1.425 on Wednesday, with feeder cattle futures $1.10 to $1.45 higher. The CME feeder cattle index on November 21 was down 10 cents to $156.58. Wholesale beef prices were mixed on Wednesday afternoon. Choice was up 38 cents at $209.01, with select boxes a penny lower at $188.64. USDA indicated FI cattle slaughter at 359,000 head through Wednesday, 6,000 larger than a week ago and 11,000 above the same week in 2016. Cash cattle traded $120-$120.50 in the North on Wednesday. The USDA Cold Storage report indicated frozen beef stocks of 506.931 million pounds, 2.2% larger than September but down 4.9% from last year.

Lean hog futures ended the Wednesday session with most contracts 45 cents to $2.15 higher. The CME Lean Hog Index for 11/20 was down 42 cents to $64.41. The national base hog average price was 6 cents higher at $56.65 this afternoon. The USDA pork carcass cutout value was $1.11 higher at $81.98 in the Wednesday afternoon report. The weekly USDA AMS hog slaughter report showed 1,378,000 through Wednesday. That is down 16,000 from the previous week but 60,000 more than the same week in 2016. Nearly all plants were dark on Thursday for the holiday. The new USDA Cold Storage report showed frozen pork stocks at the end of October totaled 597.295 million pounds. That is a drop of 3.45% from September and 0.29% lower that October 2016. The domestic and export markets continue to absorb larger 2017 production.

Cotton futures settled with 20 to 102 point gains on Wednesday. Nearby Dec was down 16 points on profit taking following a jump on Tuesday. The USDA Export Sales report is expected to show good sales numbers, though down from last week’s “best of year” 507,700 RB of Upland sales. Online cash cotton sales on Tuesday reported by The Seam were trimmed to 18,290 bales, with prices dropping 132 points to 67.52 cents/lb. The Cotlook A index for November 23 was 85 points higher to 81.60 cents/lb. The biweekly Cotton Ginnings report will be released this morning at 11:00 a.m. CST.

Market Commentary provided by:

Brugler Marketing & Management LLC
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