Ag Market Commentary
Corn futures are trading fractionally mixed this morning. They ended Thursday with most contracts 2 to 3 3/4 cents higher following the USDA reports. US corn production was increased 96 mbu to 14.280 bbu. That was mainly from an adjustment in yield (+1.9 bpa) at 171.8 bpa, as harvested acreage was down 400,000 acres to 83.1 million acres. US ending stocks for 17/18 were increased 5 mbu to 2.34 bbu, while world ending stocks fell 1.51 MMT to 200.96 MMT. The weekly EIA showed ethanol production at just 967,000 barrels per day for the week of October 6, down 43,000 bpd from the previous week. That is the lowest production number since the first week of October in 2016. Analysts are expecting the USDA weekly export sales report this morning to show 0.8-1.1 MMT in 17/18 export sales during the week of October 5.

Soybean futures are currently 2 to 3 cents higher after posting double digit gains yesterday. Nearby Nov was up 26 3/4 cents. Oct soy meal was up $11.50/ton, with nearby bean oil 16 points higher. The USDA reduced the national average soybean yield 0.4 bpa to 49.5 bpa. That left 2017 US soybean production unchanged at 4.431 mbu, as harvested acreage increased 740,000 acres to 89.5 million acres. The US ending stocks number was lowered 35 mbu, due to a known drop in carry over from 16/17. Ending stocks on the world side were tightened 1.48 MMT to 96.05 MMT. The USDA weekly export sales report is expected to show 17/18 soybean sales at 0.9-1.2 MMT this morning. Both soy meal and oil are projected to see a net reduction for 16/17 sales, as 17/18 is seen at 100,000-300,000 for meal and 5,000-22,000 MT for oil.

Wheat futures are +1/2 to +3 1/2 cents this morning, with Minneapolis spring wheat the firmest. Wheat settled Thursday with most KC and CBT contracts 1-3 cents lower, while MPLS was 5-8 cents in the red. Thursday morning’s monthly USDA report did not have very good news for wheat, as 17/18 US ending stocks rose 27 mbu to 960 mbu. Carryover from 16/17 was lowered 3 mbu to 1.181 bbu, and the 17/18 feed and residual number fell 30 mbu. World wheat ending stocks jumped a steep 4.99 MMT to 268.13 MMT, as production in India, Russia and the EU jumped a combined 5.55 MMT. Today’s USDA Export Sales report is expected to show 17/18 all wheat sales for the week of Oct 5 in the range of 300,000-500,000 MT. Japan purchased 106,045 MT of wheat from Australia, Canada, and the US, as 34,175 MT came from the US.

Live cattle futures saw losses of 62.5 cents to $1.425 on Thursday, with feeder cattle futures 37.5 cents to $2.425 lower. The CME feeder cattle index was 8 cents lower at $155.14 on October 11.Wholesale beef prices were higher in the Thursday afternoon report. Choice was up $1.12 at $197.44, while select boxes were 69 cents higher at $189.45. Week to date FI cattle slaughter was estimated at 469,000 head through Thursday, about 10,000 larger than the previous week and 15,000 head above the same week last year. There were cash sales of $111 reported on Thursday, with a few on a dressed basis at $175. The USDA lowered its fourth quarter beef production for 2017 10 million pounds to 7.115 billion pounds. Projected first and second quarter production for 2018 was reduced 35 million pounds each.

Lean hog futures ended Thursday with most contracts 2.5 to 95 cents in the red. The CME Lean Hog Index for 10/10 was $1.21 higher than the previous day at $58.32. The USDA pork carcass cutout value was 15 cents higher at $73.82 in the Thursday afternoon report. The ham was UNCH, with the belly primal $2.47 higher. The national base hog carcass price was up 75 cents in the PM report at $56.58. Estimated weekly FI hog slaughter was 1,852,000 head through Thursday, 24,000 head ahead of last week and 263,000 larger than the same week in 2016. Estimated third quarter US pork production was decreased 25 million pounds, while fourth quarter was increased 10 million pounds in yesterday’s USDA report.

Cotton futures are 30 to 40 points higher this morning after they lost 78 to 93 points on Thursday. The USDA cut the US cotton yield 19 pounds to 889 pounds per acre, due mostly to the hurricanes. That lowered US production 0.64 million bales to 21.12 million bales. Expected exports also fell to 14.5 million bales. Projected US ending stocks were trimmed 200,000 to 5.8 million bales. World ending stocks were lowered just 0.16 to 92.38 million bales. The Cotlook A index for October 11 was again UNCH from the previous day at 78.80 cents/lb. All upland cotton prevent plant acres were reported at 115,472 acres in the October report, insignificantly larger than last year.

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