AgriCharts Market Commentary

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Corn

Corn futures are currently 1/4 to 3/4 lower, after closing Wednesday 1 3/4 cents higher in most contracts. South Korea purchased 55,000 MT of US corn early Wednesday morning with delivery May 10-25. Private exporters reported a cancellation to the USDA yesterday morning of 136,000 MT of optional origin corn to South Korea for 16/17. Weekly ethanol data from the EIA report will be released this morning due to the Monday holiday. President Trump stated in a letter to the Renewable Fuels Association (RFA) that “renewables are essential to US energy strategy.” While the main breakout sessions for grains are on Friday, there will be a key note address scheduled for 8:05 am on Ag and Trade.

Soybeans

Soybean futures are trading 3 to 4 cents lower this morning. They settled yesterday mainly 3 1/2 cents lower in the front month yesterday, with some deferred contracts hanging steady or only fractionally lower. March 17 soy meal futures were down $2.40, and March 17 bean oil was 5 points lower. A Bloomberg survey shows trader estimates for US soybean acreage for 2017 at 88.3 million acres (MA), up 4.9 MA from last year. Weekly export sales data are delayed due to the short week, but will be released on Friday morning. DTN’s national average cash soybean price was at $9.5275 last night. That leaves the national basis at -73.50 cents to March17 futures, 26 cents weaker than the same time last year. Rain in Mato Grosso, Brazil is delaying soybean harvest as well as planting of the next crop. Some producers are reporting yield losses as beans swell or get moldy. Muddy roads are also limiting truck traffic to the Amazon ports.

Wheat

Wheat futures are steady to 1 1/2 cents lower in Chicago SRW and KC HRW this morning. The MPLS spring wheat contract is up 1/4 to 3/4 cents. All three markets were higher on Wednesday. CHI and KC were both mainly 5 cents higher, and MPLS was a little weaker but still up 1 1/2 cents. Egypt announced they purchased 360,000 MT of wheat for late March with 60,000 MT from Ukraine, and 300,000 MT from Russia. Jordan and Tunisia both purchased 100,000+ MT of optional origin wheat. Winter wheat conditions in Texas were bumped up 1% to 30% for good to excellent (g/e) in the state report. The rating was 41% g/e at this point last year. A Bloomberg survey shows traders expecting USDA to cut projected 2017 all wheat acreage to 46.5 million at the USDA Forum in Washington.

Cattle

Live cattle futures posted a triple digit gain in Feb 17, while April and June were up 77.5 and 47.5 cents respectively. Feeder futures were 27.5 to 55 cents higher in most contracts. The CME feeder cattle index was at $127.12 for 2/21, down 6 cents. Wholesale beef prices were higher in the afternoon report with choice boxes up $2.72 and select boxes averaging $1 higher. Trade reported on the Fed Cattle Exchange was fairly active in the morning, as 3,065 of the 3,350 head were sold, with a weighted average of $122.10. That is $3.33 higher than last week’s average. Prices were from $120.00-$124.50, with most in a tighter range of $121.00-123.25. DTN reported separate live cash sales of $124-125 across CO, NE, KS and TX, and a dressed price of $195-$196 in IA and NE. USDA will issue the Cold Storage report this afternoon at 2:00 p.m. CST, followed by the Cattle on Feed report on Friday afternoon. The average trade estimate for Feb 1 Cattle on Feed is 100.6% in one survey, with some analysts expecting both placements and marketings during January to be 10% larger than year ago.

Lean Hogs

Lean hog futures finished Wednesday with triple digit losses in several contracts, with April 17 $2.60 lower. The CME Lean Hog Index for 2/20 was at $77.24, up 17 cents vs. 2/17. The USDA’s average pork carcass value was reported at $80.24, down $4.30. The average belly price lost $24.54 in the Wednesday afternoon report! We expect a bounce back in the next few reports as bargain hunting surfaces. National cash hog base prices averaged $72.42, down 32 cents with all prices reported between $66 and $74. Regional prices drifted lower with averages of $72.95 in IA/MN and $72.89 in the WCB. Week to date slaughter was estimated at 1,319,000 head on Wednesday, up 7,000 head from last week, and 32,000 head larger than the same week last year. USDA's monthly and annual Cold Storage reports are due out after the market closes today.

Cotton

Cotton futures are 20 to 30 points higher this morning after being mixed on Wednesday (with March 17 the only contract that ended in positive territory). The Mar-Dec spread is now +39 after it was down to -67 last night. USD futures were slightly lower on the session. The International Cotton Advisory Committee projects India will increase cotton planted area by 7% year/year, and expects Chinese planted area to increase by 3% year/year. Online cash trading sales on the Seam were up to 8,046 bales, as prices rose to 70.91 cents. The AWP through Thursday is 67.19 cents but of course a long way from LDP consideration.


Market Commentary provided by:

Brugler Marketing & Management LLC
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