Ag Market Commentary

Corn futures are currently 3 to 4 cents lower following fractional losses on Friday. Nearby March gained a nickel on the week. The CFTC Commitment of Traders report indicated spec funds in corn futures and options cut back their net short position by 88,734 contracts. That net position was at -130,942 contracts as of Tuesday. Export commitments compared to the USDA forecast have now caught up to the average pace at 66%, but still lag last year’s 73%. Informa estimates that the 17/18 Argentina corn crop will be at 37 MMT, down 5 MMT from their and the USDA previous estimate. They are using 88 MMT for Brazilian corn, which is well below USDA’s January figure of 95 MMT.

Soybean futures are 6 to 8 cents lower morning. They saw most contracts 5 to 6 1/4 cents lower on Friday due to increased chances of rains in Argentina. Meal futures were down $2.60/ton, with nearby soy oil 39 points in the red. Friday’s COT report showed managed money shaving 59,689 contracts off their net short position as of 1/30 to -21,849 contracts. Today’s Stats Canada report is expected (wire surveys) to show 14.3 MMT in canola stocks on Dec 31, 6.84% larger than a year ago. On Friday, AgRural raised their 17/18 Brazil production estimate to 116.2 MMT, with Informa projecting 112.5 MMT. Consultant Informa is at 112.5 MMT. Safras & Mercado estimates that 5.69% of the country’s soybeans have been harvested, lagging the average of 7.6% and last year’s 10.1%. Progress is ahead of average in Mato Grosso, but lags in Parana.

Wheat futures are trading 5 to 7 cents lower in the CHI and KC contracts this morning as some light snow moves into the Plains. Spring wheat futures in MPLS are 1-2 cents higher as they spreads rebound from Friday’s push in the other direction. Wheat settled with losses of 3-5 cents in most CBT and KC contracts on Friday, while MPLS was down 8 in the March contract. Nearby March KC was 4.57% higher from Friday to Friday, with weakness in the later part of the week limiting gains. Pressure was felt from a stronger US dollar, up 523 points on the day. Analysts are expecting this morning’s Stats Canada report to show 23.9 MMT in all wheat stocks as of Dec 31, slightly lower than last year’s 24.1 MMT. Russia’s IKAR is projection the Russian exports during 18/19 will total 32-36 MMT, as total production is seen at a wide range of 73-82 MMT.

Live cattle futures finished the Friday session with 20 to 42.5 cent gains in the front months. Feeders were the leaders, as most nearby contracts were up triple digits. The CME feeder cattle index was up 50 cents on February 1 at $148.03. Wholesale boxed beef values were lower on Friday afternoon. Choice boxes were down 50 cents at $209.10, with Select boxes $1.09 lower at $203.45. Estimated weekly FI cattle slaughter was 629,000 head. That is up 41,000 from last week and 33,000 head larger than the same week last year. Cash trade was fairly quiet on Friday, with most sales made earlier in the week at $126.

Lean hog futures closed 37.5 to 90 cents higher in the front months on Friday. Nearby Feb was 4.05% higher for the week and posted a new life of contract high. The CME Lean Hog Index was up 2 cents on January 31 at $73.87. The USDA pork carcass cutout value was 19 cents lower at $81.63 in the Friday PM report. The national base hog weighted average price was up $1.08 to $71.59. The USDA estimated last week’s FI hog slaughter at 2,438,000, which is 68,000 larger than last week, and 111,000 head more than this week last year. Managed money spec funds in lean hog futures and options trimmed 7,265 contracts off their CFTC net long position to 52,503 contracts as of January 30. That was their smallest net long position for hogs since mid-May 2017.

Cotton futures are trading 27 to 41 points lower this morning. They were down 78 to 105 points in most nearby contracts on Friday. A higher US dollar pressured the market on Friday and it is modestly higher in overseas action on Monday. Front month March dropped 3.95% for the week as spec longs cashed out. Thursday’s CFTC Cotton On-Call report showed 154,655 contracts for unfixed call sales, with 31,827 contracts in unfixed call purchases. Spec traders in cotton futures and options backed 11,786 contracts off their large CFTC net long position to 96,376 contracts as of Jan 30. The USDA Adjusted World Price or AWP is 71.35 cents/lb, through Thursday. The Cotlook A index on February 1 was 87.85 cents/lb, up 25 points from the previous day.

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