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Ag Market Commentary
Alan Brugler - BRUG - Fri Oct 23, 4:44PM CDT

Corn rallied in the afternoon and added 1 to 3 cents to the week’s move. For the week, Dec futures were up 4.29%. The carry (a.k.a contango) shrank to only 1 cent per bushel to March. USDA announced a private export sale of 100k MT of corn to unknown under the daily reporting system. The NWS 8-14 day forecast shows drier conditions for Midwest fieldwork during election week. CFTC data from Tuesday’s close showed managed money was 218,825 contracts net long for corn. That was up 47,956 contracts on 17,404 contracts more OI. Managed money has not been this net long since March of ’18. Commercials added 118,385 new shorts, expanding their net short 80k contracts to 469,159.

Dec 20 Corn closed at $4.19 1/4, up 3 cents,

Mar 21 Corn closed at $4.20 1/4, up 2 cents,

May 21 Corn closed at $4.21 1/4, up 1 1/2 cents,

Jul 21 Corn closed at $4.20 1/4, up 1 cent,

--- provided by Brugler Marketing & Management

Soybeans rallied off of midday losses and ended the week with 4 to 10 cent gains. November outgained Jan by 3 cents from Friday to Friday, adding to the inverse/backwardation. Carry in Chinese beans is 17 yuan/MT (~7 cents/bu) from November to January. Carry for Dalian No 2 soybeans is 92 yuan/MT (~37 cents) form Nov to Jan. CBT meal futures also rallied off of midday losses and closed the session $2.10 to $4.10/ton higher. That added to the week’s gain of $18.90/ton from Friday to Friday. Bean oil futures closed the session with 34 to 42 point gains. Soybean spec traders covered 6,176 shorts on the week ending 10/20. That left spec traders 231,892 contracts net short as of the 20th. The CoT report also showed a 4,556 contract stronger net long in soymeal. Bean oil specs were reported at 82,034 net long.

Nov 20 Soybeans closed at $10.83 3/4, up 10 cents,

Jan 21 Soybeans closed at $10.81, up 8 3/4 cents,

Mar 21 Soybeans closed at $10.67 1/2, up 8 3/4 cents,

May 21 Soybeans closed at $10.61 1/2, up 6 1/2 cents,

Dec 20 Soybean Meal closed at $386.40, up $4.00

Dec 20 Soybean Oil closed at $34.11, up $0.42

--- provided by Brugler Marketing & Management

Front month wheat futures were higher on Friday. CBT wheat closed the last trading day of the week with 4 3/4 to 10 cent gains. KC HRW gained 7 to 9 1/2 cents. The winter wheats were up 1.2 and 2% on the week respectively. MGE HRS futures closed the Friday session up 2 1/2 4 1/4 cents. December HRS futures gained 17 3/4 cents from Friday to Friday. CFTC’s weekly data release showed CBT wheat spec traders were 11,138 contracts more net long on 10/20 to 49,728. Managed money’s OI was up 12,818 contracts. Managed money’s HRW OI decreased by 4,335 contracts as the net long strengthened to 38,146 contracts. For spring wheat futures, managed money’s longest lasting reported net short has ceased. Spec traders flipped to 4,492 contracts net long as of the Tuesday data from CFTC. South Korea purchased 65,000 MT of U.S. feed wheat. Taiwan purchased 88,635 MT of U.S. wheat in an international tender. Egypt’s GASC purchased 165k MT of Russian wheat.

Dec 20 CBOT Wheat closed at $6.32 3/4, up 10 cents,

Dec 20 KCBT Wheat closed at $5.69 3/4, up 9 1/2 cents,

Dec 20 MGEX Wheat closed at $5.77 1/2, up 3 cents,

--- provided by Brugler Marketing & Management

Cattle closed mixed ahead of the COF report, with 2 to 10 cent gains in 2020 expiry months. The back months were 15 to 60 cents in the red. Feeder cattle went into the weekend with 30 to 77 cent losses. For Dec feeders that was a weekly drop of 4%. The 10/22 Feeder Cattle Index dropped another $1.52 to $134.01. The bulk of the week’s Northern deals were near $104, between $102 and $106. The bulk of Southern trade was near $106, from $104-$106.50. The Commitment of Traders report showed a 21,097 contract reduction to managed money’s net long in cattle. For feeders, CFTC data showed managed money extended the net short to 8,531 contracts. USDA said there were 11.717m head on feed on Oct 1, which was 3.8% higher yr/yr and about 100k more than the average of pre report estimates. Sept placements were 73k head above the trade average guess with 2.227 million head placed. That was up 5.9% yr/yr, and the largest sept placements since 2011. Marketings were down from August, but 6.21% higher yr/yr with 1.846 million head. Wholesale boxed beef prices were mixed tightening the spread to $16.09. Choice boxes were $207.49 cwt, down by $1.37. Select boxes were up 32 cents. USDA estimated the week’s FI cattle slaughter at 643,000 head through Saturday. That was up 3k yr/yr, but YTD still trails by 3.8%.

Oct 20 Cattle closed at $103.350, up $0.025,

Dec 20 Cattle closed at $103.575, up $0.100,

Feb 21 Cattle closed at $106.625, down $0.150,

Oct 20 Feeder Cattle closed at $133.525, down $0.300

Nov 20 Feeder Cattle closed at $129.650, down $0.775

Jan 21 Feeder Cattle closed at $125.550, down $0.650

--- provided by Brugler Marketing & Management

After trading in the red at midday, Friday hog futures closed 2 to 82 cents higher. May futures stayed 32 cents in the red at the close. For December hog futures, that reduced the weekly move to minus $2.78. The CME Lean Hog Index for 10/21 was $78.60, 9 cents weaker. USDA’s National Average Base Hog price was $59.55 in the PM update, down by $1.27. Through short covering on the week ending 10/20, managed money extended their lean hog net long to 42,058 contracts. USDA’s National Pork Carcass Cutout value was a sharp $5.59 lower in the PM report at $93.25. Hams and bellies fell back by double digits, down $12.71 and $17.02 respectively. USDA estimated FI hog slaughter at 2.679 million head for the week through Saturday. That was down 11k yr/yr, but YTD slaughter still has a 1% lead over 2019’s pace.

Dec 20 Hogs closed at $67.025, up $0.825,

Feb 21 Hogs closed at $66.925, up $0.075

Apr 21 Hogs closed at $69.725, up $0.025

--- provided by Brugler Marketing & Management

Front month cotton futures were down 64 to 75 points on Friday, but Dec contracts maintained a 137 point gain for the week. From Friday to Friday, the Dec to March carry fell 9% to 0.58 cents (0.08%). Chinese cotton futures have closed red for three consecutive days on the Zhengzhou Commodity Exchange. Nov futures were down 6.5% from the 17 month high set three days earlier. Carry to Jan and March was 1.7% and 2.5% from Nov respectively. CFTC data showed managed money’s net long increased 5,253 contracts to 65,195 on 10/20. The week’s sales on The Seam were 17,641 bales for a wtd average price of 66.48 cents through Thursday. USDA’s Cotton Market Review had the week’s average cash price at 65.27 cents for the week ending 10/22. That was up 2.19 cents wk/wk and 3.78 cents above the same week last year. The Cotlook A index was firm at 76.85 cents/lb on 10/22. The AWP for the week is 55.71 cents/lb.

Dec 20 Cotton closed at 71.29, down 65 points,

Mar 21 Cotton closed at 71.87, down 64 points

May 21 Cotton closed at 72.45, down 64 points

Jul 21 Cotton closed at 72.86, down 68 points

--- provided by Brugler Marketing & Management

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