Ag Market Commentary

Corn futures are mostly 2 cents lower this morning after ending the Thursday session steady to a penny lower. Export commitments for corn are 91% of the USDA full year projection, which matches the average pace. The USDA put new crop US corn stocks @ 1.682 bbu in the first official estimate of the year. US Production for 18/19 was projected at 14.04 bbu with a 174 bpa average yield. The USDA updated the old crop cash average price a nickel higher to $3.40 with a range of $3.25-3.50. Their range for new crop is $3.30-4.30, with a midpoint of $3.80. Old crop world ending stocks were down 2.88 MMT to 194.9. The World ending stocks number for 18/19 was shown as dropping to 159.15 MMT, with a huge chunk of that coming from lower Chinese ending stocks, down 19 MMT.

Soybean futures are trading 5 to 6 cents lower this morning. They closed with most contracts 5 to 7 cents higher on Thursday. Soy meal was up $1.30/ton, with front month soy oil 11 points in the red. Total export commitments for soybeans are 98% of the USDA export projection, which was left UNCH on Thursday. That is even with the average for this week. Thursday morning’s Supply and Demand report from the USDA saw a 20 mbu increase to the US soybean crush number, which reduced ending stocks. Initial projections show a 415 mbu carryout for 18/19 on larger exports and smaller production. New crop stocks for the world are projected at 96.7 MMT and would be 5.5 MMT lower yr/yr. The US accounts for a majority of the reduction in new crop world endings stocks at 86.7 MMT. Data from China’s Ag Ministry shows that they expect total imports of soybeans to be slightly reduced in 18/19 to 95.65 MMT. USDA has them at 97 MMT for old crop and 103 MMT for 2018/19.

Wheat futures are mostly 1 1/2 to 3 cents lower this morning, after seeing losses in most contracts on Thursday. MPLS was the strongest, steady to 2 cents lower. KC and CBT were down 4 to 6 cents. Old crop wheat export commitments are now 95.6% of the USDA export projection that was cut to 910 mbu on Thursday. That still lags the average pace of 104% for this time of year. World ending stocks of 17/18 wheat are now estimated at 270.45 MMT, with new crop stocks seen at 264.33 MMT. Russian stocks of 18/19 wheat are seen at 5.72 MMT, just half of the year prior. That comes from the USDA’s expected 72 MMT production and 36.5 MMT export number for the country. Japan purchased 95,740 MT of wheat from Australia and the US in their weekly tender on Thursday, with 61,380 MT from the US.

Live cattle futures settled with most contracts 50 cents to $1.85 higher. Feeder cattle futures were up 82.5 cents to $1.45. The CME feeder cattle index was down 7 cents on May 9 at $137.93. Wholesale boxed beef values were higher on Thursday afternoon. Choice boxes were up 11 cents at $231.07, with Select boxes 19 cents higher at $209.14. Week to date FI cattle slaughter was 475,000 head through Thursday, up 3,000 head from last week and 9,000 head larger than the same week last year. Cash bids on Thursday were reported at $120-121 in the South and as high as $122 in the North. Quarterly beef production saw a 420 million pound reduction for 2018 at 27.215 billion pounds, with the second quarter down 305 million pounds from April in the WASDE report.

Lean hog futures were mixed on Thursday, with most contracts higher and nearby May down 45 cents. The CME Lean Hog Index was up 22 cents from the previous day to $63.55 on May 8. The USDA pork carcass cutout value was up 54 cents at $72.58 on Thursday afternoon. The national base hog weighted average price was 40 cents higher at $61.13. The USDA estimated week to date FI hog slaughter at 1.835 million head through Thursday. That is 18,000 fewer than last week but well above this week last year. Pork production was projected at 26.77 billion pounds in the USDA supply and demand report, down 32 mil pounds from last month.

Cotton futures are within 5 points either side of UNCH this morning after they finished the Thursday session with losses of 30 to 130 points in most contracts. The May supply and demand report from the USDA showed a slight reduction to 17/18 production based on classing data and added 500,000 bales to the export total. That trimmed ending stocks to 4.7 million bales. New crop stocks are seen at 5.2 million bales in their first estimate. USDA sees China with a 33.42 million bale carryout in 18/19, down 7.55 million bales from 17/18. The Cotlook A index was down 70 points to 93.95 cents/lb on May 9. The Adjusted World Price was updated to 75.58 cents/lb, up 59 points from the week prior.

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