AgriCharts Market Commentary

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Corn

Corn futures are currently to 1 cent higher since posting UNCH to penny gains on Thursday. The weekly EIA report showed ethanol production picking up to 1.068 million barrels per day. That was 52,000 bpd larger than the previous week, as stocks of ethanol dropped 132,000 barrels to 22.753 million barrels. The USDA sees the US planted acreage number at 90 million acres in their annual Ag Outlook Forum. The average farm price for corn is seen a dime higher at $3.40 in 18/19. Traders are expecting to see 1-1.5 MMT in old crop corn export sales, with 0-100,000 MT in new crop sales this morning in the weekly Export Sales report. Argentina corn production is seen at 35 MMT by the Rosario Grain Exchange, with the Buenos Aires Grain Exchange at 37 MMT. China imported 560,000 MT of sorghum in January according to their customs data, the most in 6 months. They have subsequently launched an anti-dumping investigation that is likely to put the brakes on imports.

Soybeans

Soybean futures are mostly 3 to 4 cents higher this morning. They ended Thursday with losses of 1 to 2 1/2 cents in most contracts. Soy meal futures were down $1.10/ton, with nearby soy oil 3 points lower. A private export sale of 110,000 MT of soybeans was reported by the USDA Thursday morning to unknown destinations. In the annual Ag Outlook Forum, the USDA chief economist expects US producers to plant 90 million acres of soybeans. The average soybean price in 2018/19 is expected to be down a nickel to $9.25. Weekly Export Sales for old crop are expected to range 600,000 to 900,000 MT this morning, with 0-200,000 MT for new crop. Soy meal is seen at 200,000-450,000 MT, with soy oil at 10,000-35,000 MT. The Rosario Grain Exchange expects the 17/18 Argentine crop at 46.5 MMT, which is s shade under the new BAGE projection of 47 MMT.

Wheat

Wheat futures are trading roughly 4 cents higher this morning in the Chicago and KC contracts. MPLS spring wheat is up 1 to 1 cents. Wheat finished Thursday with most CBT and KC contracts 4 to 6 cents higher, as MPLS was up 1-3 cents. Analysts are expecting the USDA's Export Sales report to show all wheat old crop sales of 250,000 to 500,000 MT for the week of Feb 15. They also estimate that new crops sales will total 0-100,000 MT. The USDA released a projection of 46.5 million acres of wheat planted for the 2018/19 marketing year. That is above some published trade estimates (Bloomberg average 46.38) and the planted acres from last year. They also expect the average cash price for wheat to hit $4.70 in 2018/19, 10 cents higher than 17/18. Russia's IKAR expects the country to export 37.5 MMT of wheat during 17/18, nearly 0.9 MMT larger than their previous estimate.

Cattle

Live cattle futures settled the Thursday session with weakness in the front months. Nearby Feb was $1.30 lower, with deferred contracts slightly higher. Feeder cattle futures were 27.5 to $1.025 lower. The CME feeder cattle index was up 6 cents on February 21 at $148.05. Wholesale boxed beef values were higher on Thursday afternoon. Choice boxes were up $1.03 at $218.40, with Select boxes 14 cents higher at $212.06. Estimated weekly FI cattle slaughter was 441,000 head through Thursday, 4,000 head fewer than the same week last year. Most cash trade has been reported at $128-$128.50 so far this week. Analysts are estimating that tonight’s USDA Cattle on Feed report will show on feed numbers as of Feb 1 up 7.4% from a year ago at 11.575 million head. Thursday afternoon’s Cold Storage report put beef stocks at the end of January at 499.554 million pounds. That is 2.36% more than December while nearly 7.18% lower than January 2017.

Lean Hogs

Lean hog futures posted strong 70 cent to $1.65 gains on Thursday. The CME Lean Hog Index on February 20 was $70.78, down 63 cents from the previous day. The USDA pork carcass cutout value was 3 cents lower at $78.70 in the Thursday PM report. The national base hog weighted average price was down 38 cents at $63.55. The USDA estimated week to date FI hog slaughter at 1,802,000 through Thursday. That is down 48,000 head from the previous week but 40,000 head more than the same time last year. The USDA expects the US to produce 26.8 billion pounds of pork during 2018, up from 25.6 billion pounds in 2017. They also see the average live price down $2.52 to $48/cwt in 2018. Pork stocks in cold storage at the end of January totaled 567.984 million pounds. That was an increase of 15.9% over last month, and 8.35% larger than last year. That yr/yr increase came from a large jump in belly stocks over last year’s all-time low for the month of January.

Cotton

Cotton futures are currently 29 lower to 35 higher, with nearby March retreating from a strong 3 day rally ahead of the weekend. They were mixed on Thursday, with nearby March 163 points higher on thin trade. Deferred contracts were mostly steady to 92 points lower. Cotton acreage is expected to hit 13.3 million acres in 2018 according to the USDA's Ag Outlook Forum. That is well above the 2017 number of 12.6 million acres. The average price expected by the USDA chief economist is 63 cents/lb, down 6 cents from the previous week. The USDA Adjusted World Price or AWP was updated to 69.69 cents/lb on Thursday, 54 points higher than the previous week. The Cotlook A index was up 185 points from the previous day on February 21 at 88.70 cents/lb.


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