Ag Market Commentary

Corn futures are currently fractionally higher after closing the Wednesday session with fractional to 1 3/4 cent gains. EIA Ethanol production for the week of Feb 2 averaged 1.057 million barrels per day. That is 17,000 bpd larger than the previous week. Ethanol stocks rose 23.489 million barrels, 444,000 barrels larger than the week prior. Analysts are expecting this morning’s Export Sales report to show 1.3-1.8 MMT in old crop corn sales for the week that ended Feb 1, with 0-100,000 MT seen for new crop. Very little change is expected in the US ending stocks figure in this morning’s WASDE report. The US officially exported 3.564 MMT of corn during December, down 9.47% from the December 2016 but 37.36% larger than November. On Wednesday, Taiwan purchased 55,000 MT of US corn for April-May delivery. South Korea passed on offers for 165,000 MT of optional origin corn, because in their opinion prices were too high.

Soybean futures are trading 2 to 2 cents higher after ending Wednesday with most contracts 3 1/4 to 5 cents lower. Meal futures were up $3.70/ton yesterday, with nearby soy oil 60 points lower. The average trade guess ahead of the weekly Export Sales report calls for 400,000-700,000 MT for old crop soybean sales. This comes after a disappointing 359,014 MT was report in last week’s report. There are also 0-100,000 MT expected for new crop sales. Soy meal sales are seen at 150,000-450,000 MT, with 8,000-35,000 MT projected in soy oil sales. Data from Census shows US soybean exports during December at 6.452 MMT. That is 19.17% lower than Dec 2016 and lagged November 2017 by 28.57%. A Reuters survey shows traders expecting the final 17/18 Brazilian production number to total 112.6 MMT, up from 110.2 MMT in January. USDA will update their numbers for Brazil and Argentina at 11 AM CST.

Wheat futures are 2 to 3 cents lower this morning in the SRW and HRW futures. The MPLS spring wheat is trading fractionally higher. Wheat saw sharp gains of 12 to 14 1/4 cents in most CBT and KC contracts on Wednesday. MPLS was 4 to 6 cents higher on the day. Forecasts for continued dryness in the Southern Plains are providing support. All wheat export sales are expected to run 200,000-500,000 MT in this morning’s USDA report according to pre-report surveys. During December, the US exported 2.148 MMT of wheat. That was 2.36% below last year but 53.81% larger than November. Russian customs data shows that 33.026 MMT of wheat was exported during calendar 2017, a jump of 30.4% from 2016.

Live cattle futures settled steady to 60 cents lower in the front months on Wednesday, with back months higher. Feeder cattle futures were also mixed with nearby March 42.5 cents in the red. The CME feeder cattle index was up 15 cents on February 6 at $148.10. Wholesale boxed beef values were higher on Wednesday afternoon. Choice boxes were up 94 cents at $209.37, with Select boxes 41 cents higher at $203.14. Estimated FI week to date cattle slaughter was 346,000 head through Wednesday. That was down 5,000 from the previous week but 11,000 head larger than the same week last year. US export data shows 260.83 million pounds of beef was exported during December. That was slightly larger than November and the fifth straight monthly record, 2.5% above December 2016. Total 2017 exports were a record 2.862 billion pounds, and up 12.2% from 2016.

Lean hog futures finished the Wednesday session with most contracts 32.5 cents to $2.20 lower. The CME Lean Hog Index on February 5 was at $74.84, up 36 cents from the previous day. The USDA pork carcass cutout value was 89 cents lower at $77.34 in the Wednesday PM report. The ham primal was $2.34 in the red, with the belly the only other cut lower, down $4.40. The national base hog weighted average price was down $1.45 at $71.15 Wednesday afternoon. The USDA estimated FI hog slaughter at 1,393,000 through Wednesday. That is down 3,000 head from the previous week and 72,000 head more than the same time last year. Exports of pork during December totaled 514.317 million pounds, a record for that month but 3.9% lower than November. During 2017, the US shipped 5.632 billion pounds of pork, up 5.9% from 2016 and an all time yearly record.

Cotton futures are 19 to as much as 54 points higher this morning ahead of the USDA supply/demand report. They were mixed on Wednesday with front months 6 to 23 points lower and deferred contracts steady to 21 points in the green. The US dollar was 751 points higher on Wednesday and is a little bit higher this morning. Trade date from the US Census shows 304,531 MT of US cotton was exported during December. That was 8.23% larger than a year ago and 92.42% above November. The USDA Adjusted World Price or AWP, currently at 71.35 cents/lb, will be updated on Thursday afternoon. The Cotlook A index on February 6 was 87.20 cents/lb, down 90 points from the previous day. Online cash sales reported on the Seam were shown at 7,640 bales, with price averaging 70.69 cents/lb, down 20 points from the previous day.

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