Ag Market Commentary

Corn futures are trading fractionally lower this morning. They ended Monday with 5 cent gains in the nearby contracts, as weekend rains in Argentina were limited and the spec fund money was flowing. Preliminary open interest for Monday showed an increase of 8,832 contracts. Monday morning’s USDA Export Inspections report indicated that 835,131 MT of corn was shipped during the week of 2/8. That is 23.61% lower than the previous week and lags the same week last year by 33.51%. Following Thursday’s update to the USDA export projection, corn export commitments are now 65.34% of that number. That now lags the average of 68% and last year’s 74%. In a tender that closed on Monday, South Korea purchased 120,000 MT of corn most likely sourced from the US for April-May delivery.

Soybean futures are mostly 1 to 3 cents higher this morning. They finished Monday with sharp gains of 16 to 19 cents. The trucker strike in Argentina was lifted over the weekend, allowing shipments to resume. That was ignored because Meal futures were up $14.00/ton, with nearby soy oil down 11 points. Preliminary open interest showed a modest rise of 2,345 contracts, with short covering in the March and some light new buying in the back. There were 1.319 MMT in soybeans inspected for export during the week that ended 2/8. That is 1.16% larger than a year ago and 14.55% larger than last year. Export commitments for soybeans through last Thursday’s report are 77.45% of the new USDA projection. That is compared to the average for that week of 90% and 87% last year.

Wheat futures are currently steady to 2 cents in the red in most CBT and KC contracts. MPLS is fractionally to a penny higher. They ended the Monday session with 15 cent gains in the nearby CBT contracts, with KC HRW up 12 to 15 cents. There was active index fund rolling out of the March. MPLS was the weakest because of potential acreage expansion, but still managed to be 6 to 7 cents higher on the day. Monday morning’s Export Inspections report showed 487,902 MT of wheat shipped for the week that ended 2/8. That was 13.57% above the last week and 50% larger than the same week last year. All wheat export commitments are now 81.02% of the newly updated USDA export projection. The average is 87% for that week, with last year hitting 89% at this time. Australia made the lowest offer in Iraq’s recent tender, with the offers to remain valid until Thursday.

Live cattle futures saw gains of 60 cents to $1.375 in most contracts on Monday. Feeder cattle futures were 82.5 cents to $1.825 higher on the day despite the higher feed prices. The CME feeder cattle index was up 4 cents on February 9 at $147.63. Wholesale boxed beef values were higher on Monday afternoon. Choice boxes were up $1.72 at $208.24, with Select boxes $1.23 higher at $203.97. Estimated FI cattle slaughter was 110,000 head on Monday. That was down 4,000 from the previous week and 1,000 head fewer than the same Monday last year. Most cash trade was in the $126 range last week.

Lean hog futures posted gains of $1 to $1.675 in most contracts yesterday, although nearby Feb was down 10 cents ahead of Wednesday’s expiration. The CME Lean Hog Index on February 8 was $75.38, down 25 cents from the previous day. The USDA pork carcass cutout value was $2.27 higher at $76.71 in the Monday PM report. All cuts were reported higher, with the belly primal up $8.82. The national base hog weighted average price was down 60 cents at $68.88 Monday afternoon. The USDA estimated FI hog slaughter at 462,000 on Monday. That is up 1,000 head from the previous week and 21,000 head more than the same time last year.

Cotton futures are mostly 20 to 25 points lower on Tuesday morning. They ended the Monday session with mixed trade, as nearby contracts were 14 to 23 points lower with back months higher. The USDA reported that 354,825 bales of upland cotton was classed during the week of Feb 8. That would bring the total for the 2017/18 crop to 18.243 million bales. The USDA Adjusted World Price or AWP was updated to 69.45 cents/lb Thursday morning. The Cotlook A index on February 9 was 87.40 cents/lb, up 70 points from the previous day. The NCC grower survey released on Saturday anticipates a 3.7% increase in US all cotton acreage in 2018. That survey shows that producers intend to plant 13.078 million acres of cotton in 2018.

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