Ag Market Commentary

Corn futures are currently 1 to 1 1/2 cents lower after closing steady to fractionally higher in most contracts on Thursday. The morning’s Export Sales report showed export shipments for the week of Feb 1of 961,200 MT. That is 8.1% lower than the previous week and lags the same week last year by 14.54%. Along with increasing expected exports 125 million bushels in the WASDE report, the USDA also raised the range for the cash average price to $3.05-3.55, with a mid-point 5 cents higher @$3.30. Thanks to the 3 MMT reduction in Argentine corn production, the US and Brazil’s exports were both raised. The USDA is most likely waiting until Brazil’s winter corn crop is planted before it is willing to cut production and put it in line with private and Brazilian government estimates.

Soybean futures are trading 3 to 4 cents lower this morning after being 3 to 4 3/4 cents higher in most contracts on Thursday. Meal futures were up $6.30/ton, with nearby soy oil down 35 points. The USDA reported 1.537 MMT in soybean exports during the week of 2/1. That was a jump of 26% from the previous week but 1.9% lower than the same week in 2017. Soy meal shipments were shown at 290,904 MT, with soy oil at 8,517 MT. Thursday morning’s WASDE report showed the USDA narrowing the US cash average farm price by 20 cents to $8.90-9.70, leaving the mid-point at $9.30. With the Brazil crop 2 MMT higher, their respective export projection was raised by the USDA to 69 MMT. The reduction in Argentine production caused their crush total to be trimmed 1.16 MMT, which gave the US bean meal market a boost. The Buenos Aires Grain Exchange now estimates the crop at 50 MMT, down 1 from their previous report.

Wheat futures are mostly 4 to 5 cents lower this morning in the Chicago and KC HRW contracts. Minneapolis spring wheat is 1 1/2 to 2 1/2 lower. They settled the Thursday session with most CBT and KC contracts 3 to 6 1/2 cents in the red, as MPLS was fractionally to 1 cents higher. All wheat shipments were reported at 467,829 MT in Thursday’s Export Sales report. That was 9.18% lower than last week and 22.16% behind the same time last year. The USDA cash average farm price range for wheat was trimmed 10 cents to $4.55-$4.65, with the mid-point left at $4.60. China’s domestic use was increased 1MMT in Thursday’s WASDE, with Russian exports also up 1 MMT to 36 MMT. Most of the US loss in exports was gained by Canada, up 500,000 MT. Egypt’s GASC is seeking wheat for March 12-22 delivery, with the tender to close Friday. Russia has dominated that market as of late.

Live cattle futures closed mixed on Thursday, as nearby Feb was up 17.5 cents and back months were lower. Feeder cattle futures were steady to $1.05 in the red on the day. The CME feeder cattle index was down 8 cents on February 7 at $148.02. Wholesale boxed beef values were mixed on Thursday afternoon. Choice boxes were down 84 cents at $208.53, with Select boxes 65 cents higher at $203.79. Estimated FI week to date cattle slaughter was 464,000 head through Thursday. That was down 5,000 from the previous week but 15,000 head larger than the same week last year. The USDA reported beef exports during the week of 2/1 at 16,049 MT, 4.53% better than the previous week and 17.75% larger than last year. Cash trade is slow to develop this week with packers and feedlots still not agreeing to a price as of Thursday.

Lean hog futures were mixed on Thursday, with nearby Feb down 45 cents and back months higher. The CME Lean Hog Index on February 6 was at $75.38, up 54 cents from the previous day. The USDA pork carcass cutout value was 42 cents lower at $76.92 in the Thursday PM report. The national base hog weighted average price was down $1.26 cents at $69.59 Thursday afternoon. The USDA estimated FI hog slaughter at 1,858,000 through Thursday. That is down 3,000 head from the previous week but 96,000 head more than the same time last year. Pork export shipments were at a MY high of 24,068 MT last week, up 8.4% from the previous week and 9.1% larger than the same week in 2017.

Cotton futures are trading 23 to 29 points higher this morning. They ended Thursday with most contracts steady to 66 points higher. All upland cotton old crop export sales were reported at 402,411 RB during the week of Feb 1. That was the second largest weekly total this MY and 93.41% above the same week last year. There was also 118,509 MT reported for new crop, a MY high. The US supply and demand table saw US exports cut 300,000 bales to 14.5 million bales. That caused ending stocks to increase to 6 million bales. Estimated world ending stocks rose 760,000 bales to 88.55 million bales, as both US and China were increased. The USDA Adjusted World Price or AWP was updated to 69.45 cents/lb this morning, which was down 195 points from the previous week. The Cotlook A index on February 7 was 86.95 cents/lb, down 25 points from the previous day.

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