Ag Market Commentary

Corn futures are trading 1 to 1 1/2 cents lower this morning. They closed with fractional losses on Tuesday, weighted down by losses in wheat. The US cash average price as of Monday afternoon was $3.36 1/2 according to DTN, 1 3/4 cents off the same time last year. That would put the national average basis at -30 1/2 cents, 6 3/4 cents stronger than a year ago. Dr. Michael Cordonnier trimmed his projected Brazil 17/18 corn production number another 2 MMT to 86 MMT. That is 9 MMT (354 million bushels!) below the February USDA estimate.



Soybean futures are currently 2 to 3 cents lower after 7 to 10 cent gains in most nearby contracts on Tuesday. Meal futures were up $7.40/ton, with nearby soy oil down 28 points. The CME group hiked meal margin requirements from $1000 to $1200. Forecasts are calling for continued dryness in Argentina this week, with a chance of rain by the weekend. According to DTN, the average US cash price for soybeans on Monday was $9.32 3/4, 46 cents lower than the same day in 2017. That would put the average soybean basis at -69 cents, 6 1/2 cents stronger than last year. Analysts are expecting Thursday’s NOPA report to show 165.511 mbu of soybeans were crushed during January. That would be 3.04% larger than the same time month last year.



Wheat futures are 3 to 4 cents lower this morning in the CHI and KC contracts. They ended Turnaround Tuesday with most KC and CBT contracts 2 to 3 1/2 cents lower. Minneapolis spring wheat is fractionally lower this morning after MPLS was 7 to 8 1/4 cents lower on Tuesday. The CME Group raised margin requirements for KC HRW by $150 and increased margins for CBT wheat by $50. Japan’s Ag ministry is seeking 84,683 MT of wheat to be sourced from the US and Canada. The tender will close Thursday, with 60,463 MT sought from the US. The ABARE in Australia estimates the country’s winter wheat crop at 21.2 MMT, vs. the USDA’s 21.5 MMT. China sold 279,335 MT of wheat from state reserves on Tuesday, with 2.057 MMT offered at the auction. The US isn’t the only one have trouble exporting. France AgriMer cut projected 2017/18 French exports and raised projected soft wheat carryover to 3.25 MMT today from 2.9 MMT.



Live cattle futures finished the Tuesday session with most front months steady to 30 cents lower and back months higher. Feeder cattle futures were steady to 40 cents lower in the nearby contracts, as deferred months were higher. The CME feeder cattle index was down 6 cents on February 12 at $147.57. Wholesale boxed beef values were lower on Tuesday afternoon. Choice boxes were down 88 cents at $207.36, with Select boxes down 84 cents at $203.13. Estimated weekly FI cattle slaughter was 227,000 head through Tuesday. That was down 3,000 from the previous week but 1,000 head more than the same week last year. Cash cattle trade has yet to develop for the week.



Lean hog futures were mostly lower on Tuesday, with nearby Feb 27.5 cents higher ahead of Wednesday’s expiration. The CME Lean Hog Index on February 9 was $74.72, down 66 cents from the previous day. The USDA pork carcass cutout value was 79 cents higher at $77.50 in the Tuesday PM report. The national base hog weighted average price was down $1.15 at $67.76 Tuesday afternoon. The USDA estimated week to date FI hog slaughter at 924,000 through Tuesday. That is down 3,000 head from the previous week but 52,000 head more than the same time last year.



Cotton futures are 38 to 51 points lower this morning. They saw most contracts hovering close to steady on Tuesday, with the nearby contracts slightly lower and back months slightly higher. The National Cotton Council estimates that the US 17/18 export number will reach 15 million bales. That is 500,000 bales more than the USDA has projected after lowering its estimate last week. The USDA Adjusted World Price or AWP was updated to 69.45 cents/lb Thursday morning. The Cotlook A index on February 12 was 87.55 cents/lb, up 15 points from the previous day. Cash sales reported on the Seam were shown at 9,558 bales, with the average price down 200 points from the previous day at 69.01 cents/lb.






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