Ag Market Commentary

Corn futures are mostly 1 to 1 1/4 cents higher this morning. They closed steady to fractionally lower on Wednesday ahead of today’s USDA reports. The weekly EIA report showed ethanol production for the week of May 4 rising 8,000 barrels per day from the previous week to 1.04 million barrels. Ethanol stocks dropped 178,000 barrels to 21.964 million barrels. Analysts are expecting to see 0.7-1 MMT in weekly old crop corn export sales tomorrow morning, with 50,000-300,000 MT estimated for new crop sales. World corn carryout for 17/18 is expected to be cut 2.6 MMT to 195.18 MMT by the USDA tomorrow. Ending stocks for 18/19 are seen at 183.6 MMT by analysts, a nearly 14 MMT drop from the current USDA 17/18 ending stocks.

Soybean futures are currently 4 to 5 cents higher after being 1 to 4 cents in the red at Wednesday’s final bell. Preliminary open interest rose 9,265 contracts, with net new selling concentrated in August and November. Soy meal was up 50 cents/ton, with front month soy oil 38 points higher. The trade ideas for old crop soybean sales in this morning’s USDA report are running 300,000 to 600,000 MT in the week that ended 5/3. New crop is seen at 100,000-300,000 MT. Soy meal sales are projected at 100,000-400,000 MT with bean oil sales at 15,000-60,000 MT. For the WASDE report, world soybean ending stocks for 17/18 are estimated 0.9 MMT lower at 89.9 MMT. Analysts are expecting the USDA’s initial 2018/19 world carryout projection at 91.2 MMT, a slight increase from 17/18. Brazilian analyst Celeres is putting the soybean crop there at 117.8 MMT.

Wheat futures are trading 1 1/2 to 3 1/2 cents higher ahead of the weekly USDA Export Sales report. They settled the Wednesday session with 3 to 6 3/4 cent losses in most contracts. All wheat export sales during the week of May 3 are estimated to run 0-350,000 MT for old crop and 200,000-350,000 MT for new crop. World ending stocks for old crop wheat are seen as steady to slightly lower in Thursday’s USDA S&D report. Carryout for the 18/19 MY is expected to drop ~2 MMT from the prior year to 269.1 MMT. Stats Canada will release their quarterly stocks report on Friday, with March 31 wheat stocks expected slightly lower than last year.

Live cattle futures ended Wednesday with most contracts 15 cents to $1.10 lower. Feeder cattle futures were down 52.5 cents to $1.025. The CME feeder cattle index was up 9 cents on May 8 at $138.00. Wholesale boxed beef values were mixed on Wednesday afternoon. Choice boxes were up 3 cents at $230.96, with Select boxes 98 cents lower at $208.95. Estimated FI cattle slaughter was 356,000 head through Wednesday, up 3,000 head from last week and 9,000 head larger than the same week last year. The FCE online auction showed no sales on the 2,456 head offered. Cash trade is currently at a standstill with bids and asks far apart.

Lean hog futures were mostly a dime to $1 lower yesterday, with June 27.5 cents in the green. The CME Lean Hog Index was up 4 cents from the previous day to $63.33 on May 7. The USDA pork carcass cutout value was up 74 cents at $72.04 on Wednesday afternoon. The loin was the only cut reported lower. The national base hog weighted average price was 65 cents lower at $60.63. The USDA estimated week to date FI hog slaughter at 1.374 million head through Wednesday. That is 15,000 fewer than last week but 59,000 above this week last year.

Cotton futures are 30 to 42 points lower this morning on profit taking after they saw gains of 30 to 48 points on Wednesday. Crude oil was $2.18/barrel higher on Wednesday and also higher overnight. Analysts are expecting to see 150,000-225,000 RB in old crop sales tomorrow morning. They also expect the USDA to once again raise its projection for old crop cotton exports 200,000-300,000 bales in the WASDE report. The USDA cotton Adjusted World Price, currently at 74.99 cents/lb will be updated tomorrow. The Cotlook A index was up 1.40 cents to 94.65 cents/lb on May 8. On Wednesday, China sold 18,800 MT of cotton from state reserves, 62.63% of the total offered. Celeres estimates Brazil’s 17/18 cotton crop at 1.87 MMT (~8.58 million bales), a 24% jump from the previous year.

Market Commentary provided by:

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