Ag Market Commentary

Corn futures are currently 1 to 2 cents higher after seeing most contracts 7 to 8 cents lower on Wednesday. Bearish ethanol data and spillover selling from soybeans were features yesterday, with rain forecasts on the 7-day QPF for most of the Corn Belt not helping. Trade estimates are ranging 400,000-800,000 MT for old crop corn export sales, with 250,000-550,000 MT expected for new crop ahead of this morning’s FAS report. Ethanol stocks rose 418,000 barrels last week to 22.393 million barrels, the largest inventory since the last week in March. Analysts are expecting old crop world corn ending stocks to be down 1.09 MMT to 191.6 MMT, with new crop at 156.27 MMT, up 1.58 MMT from the June estimate.

Soybean futures are trading 2 to 3 cents higher this morning. They ended the Wednesday session with 22 to 23 cent losses. The market was weighed upon by the continued trade dispute with China and position adjustments in front of today’s WASDE release. Nearby soy meal was down just $1.40/ton, with soy oil 55 cents lower. Soybean export sales for old crop are seen at 200,000-500,000 MT, with 250,000-550,000 MT for new crop in this morning’s USDA weekly Export Sales report. Soy Meal sales are expected at 80,000-400,000 MT, with soy oil at 10,000-40,000 MT. The average trade guess for old crop world soybean stocks is for a 0.49 MMT reduction to 92 MMT, as new crop is seen up 1.68 to 88.7 MMT. The WASDE report is scheduled for release at 11 am CDT.

Wheat futures are mostly 2 to 3 cents higher this morning in the Chicago and KC contracts. MPLS spring wheat is fractionally lower. They ended Wednesday with most winter wheat contracts down 19 to 23 cents and with MPLS down 8 to 12 cents. Spillover selling pressure came from corn and soybeans. A sharply higher US dollar also weighed on the market. Analysts are expecting 18/19 US wheat export sales to be in the range of 200,000-500,000 MT in this morning’s Export Sales report. Old crop world ending stocks are estimated at 272.2 MMT, down slightly from the previous report. USDA’s new crop is seen at 265.05 MMT, which would be down 1.11 MMT from June. A cut in Russian production is expected.

Live cattle futures settled $1.50 to $1.60 lower. Feeder cattle futures were down $2.20 to $2.625. The CME feeder cattle index was up $1.67 from the previous day at $145.08 on 7/10. Wholesale boxed beef values were mixed on Wednesday afternoon. Choice boxes were up 12 cents to $207.44, while Select boxes were $1.25 lower at $197.14. USDA estimated FI cattle slaughter through Wednesday at 359,000 head, up 6,000 the same week last year. No sales were reported in the FCE auction. Cash bids of $108 were reported on Wednesday, with a few dressed sales of $175 in the North.

Lean hog futures finished the day with most contracts 97.5 cents to $1.75 lower. Soon to expire July was up 27.5 cents, staying close to cash. The CME Lean Hog Index was down 25 cents on July 9, to $81.67. The USDA pork carcass cutout value was down 50 cents on Wednesday afternoon at $83.60. The national base carcass price was down 30 cents from the previous day, reported at $75.88. USDA estimated FI hog slaughter at 1.357 million head through Wednesday, 39,000 head above last year.

Cotton futures are trading 84 to 115 points higher this morning ahead of the USDA Export Sales and Supply/Demand reports. They were down a sharp 167 to 226 points in most front months on Wednesday. Selling came from the continued Chinese trade dispute, as President Trump released list of another $200 billion Chinese goods to target for a 10% tariff. Hearings on the list are expected to be in the Aug 20-23 time frame. This comes less than a week after both countries implemented tariffs on $34 billion of each other’s goods, including US cotton. Pressure was also apparent from strength in the US dollar. The Cotlook A index was up 250 points from the previous day on July 9 to 94.60 cents/lb. The weekly USDA AWP is 74.59 cents/lb through Thursday.

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