AgriCharts Market Commentary

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Corn

Corn futures are trading fractionally higher this morning. They closed 3/4 to 1 1/4 cent lower on Tuesday, despite posting 3-4 cent gains post report. The USDA updated the US ending stocks estimate to 2.437 bbu, a 50 mbu tightening from November and below most expectations. That came from higher ethanol usage, as production was left unchanged. The USDA tightened the cash average farm price by 10 cents to a range of $2.85-3.55, with the expected average remaining at $3.20. The world ending stocks were increased 0.22 MMT to 204.08 MMT. That was mostly from larger carryover from 16/17. Production for Brazil was left unchanged at 95 MMT by the USDA, although CONAB now estimates the crop at 92.2 MMT and some private estimates are as low as 87 MMT.

Soybeans

Soybean futures are mostly3 to 4 cents per bushel higher this morning. They settled Tuesday with 4 1/4 to 7 cent losses, as prices weakened into the close from 3-4 cent gains earlier. December meal was down $3.10/ton, with nearby bean oil 4 points lower. Tuesday’s USDA Supply and Demand report showed estimated US soybean ending stocks 20 mbu larger than in November. Most of that increase was from a reduction in the US export projection by 25 mbu, with seed usage raised 5 mbu. The cash average soybean price range was narrowed 30 cents to $8.60-$10.00, leaving the average mid-point at $9.30. On the World side, both Argentine and Brazilian production was left alone at 57 MMT and 108 MMT. CONAB now sees the Brazilian crop at 109.2 MMT. The USDA added 0.42 MMT to the world ending stocks number, taking it to 98.32 MMT due to larger beginning stocks and a reduction in expected non-US crush.

Wheat

Wheat futures are currently 2 to 3 cents higher after being mostly 1 to 3 cents lower on Tuesday. The nearby Dec contracts expire tomorrow and had zero trades overnight. The December WASDE report showed an increase of 25 mbu in the US wheat ending stocks, taking it to 960 mbu. There was a 25 mbu reduction to the export total, with Canadian competition cited. The USDA narrowed the cash average price range for wheat by 20 cents to $4.50-$4.70, as the mid-point was left at $4.60. The world ending stocks number went against expectations, and was raised 0.89 MMT to 268.42 MMT. Canadian production was increased 3 MMT, with Russian exports up 0.5 MMT. Japan’s MOA is seeking 147,696 MT in Australia, Canada, and US wheat, with 95,366 MT from the US. The tender will close Thursday.

Cattle

Live cattle futures finished the Tuesday session with most contracts 80 cents to $1.425 higher. Feeder cattle futures were $1.65 to $2.225 higher in most contracts. The CME feeder cattle index on December 11 was down 43 cents to $153.89. Wholesale boxed beef values were mixed on Tuesday afternoon. Choice was down $1.47 at $204.06, with select 26 cents higher at $185.92. Estimated week to date FI cattle slaughter was 236,000 head through Tuesday, 3,000 head fewer than the previous week but 6,000 head larger than the same week last year. The FCE has 704 head of cattle listed for Wednesday morning’s online auction. The USDA trimmed estimated fourth quarter beef production by 95 million pounds to 6.87 billion pounds. The 4Q figure is still the largest in at least 14 years. Estimated production for 2018 was cut 30 million pounds to 27.59 billion pounds.

Lean Hogs

Lean hog futures ended the day 15 cents higher in the nearby Dec contract, as the rest of the back months were 20 to 65 cents lower. The CME Lean Hog Index for 12/8 was down 31 cents to $65.17. The USDA pork carcass cutout value was down 57 cents at $81.12 in the Tuesday afternoon report. The belly primal was $11.46 lower, with the other cuts higher. The national base hog price was 72 cents lower at $58.15 this afternoon. The WCB was down 94 cents, with the IA/MN region 98 cents lower. The USDA daily FI hog slaughter was 932,000 head WTD through Tuesday. That was up 1,000 head from the previous week and 49,000 head more than the same week last year. The USDA updated the pork production table, trimming 180 million pounds off the fourth quarter production to 6.775 billion pounds. They also lowered expected 2018 production 10 million pounds to 26.915 billion pounds.

Cotton

Cotton futures are currently 43 to 60 points higher. They saw 8 to 37 point losses on Tuesday, despite a supportive USDA report. The US dollar held back gains as it was up 220 points. The USDA Cotton Ginnings report shows that as of December 1, 11.335 million RB had been ginned in the US. That was nearly 10% larger than this time last year and an increase of 3.408 million RB over the mid-November report. The USDA raised the US production number slightly to 21.44 million bales, on a 2 lb increase in average yield to 902 lbs/ac. The US ending stocks number was lowered 300,000 bales, as exports were raised by that amount. The average farm cash price range was raised 3 cents to 63-69 cents, with the mid-point up to 66 cents/lb. The world ending stocks number was trimmed 2.88 million bales to 88 million bales. Production in India was trimmed 0.5 MMT, and Pakistan was down 0.95 MMT.


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