Ag Market Commentary

Corn futures are hovering close to UNCH this morning ahead of the USDA reports. They closed 1 to 2 1/4 cents lower on Thursday. The weekly FAS Export Sales report showed 554,492 MT in old crop corn sales and 657,670 MT for 2018/19. Total 18/19 outstanding sales are 54.22% larger than the same week in 2017. Shipments last week were 1.429 MMT, up 46.76% from last year. The trade appears to expect 2017/18 world ending stocks will be trimmed by ~1.2 MMT to 190.5 MMT in the WASDE report. CONAB trimmed their 17/18 Brazil corn production number by 0.75 to 82.18 MMT. China sold 1.176 MMT of corn from state reserves in an auction on Thursday, totaling 29.51% of the amount offered.



Soybean futures are currently 1 1/2 to 4 cents lower. They settled 6 to 7 cent lower yesterday. There was a little light long liquidation on Thursday, with preliminary open interest down 2,386 contracts. Nearby soy meal was down $3.10/ton, with soy oil 3 points lower. Old crop soybean export sales totaled 421,841 MT in the week that ended on August 2, as new crop sales were at 532,540 MT. Soybean exports were heavier than normal for this time of the year at 1.016 MMT. The average trade estimate for today’s WASDE report has old crop world ending stocks at 95.9 MMT, while new crop carryout is seen at 99.5 MMT. CONAB’s monthly crop report bumped their Brazilian soybean production estimate to 118.99 MMT, matching USDA’s July number.



Wheat futures are UNCH to 4 cents lower this morning. They saw losses of 3 to 6 cents in most contracts on Thursday. USDA Weekly Export Sales totaled only 317,066 MT, in the middle of trade estimates. That was down 17.1% from a week ago and 31.7% lower than the same time in 2017. Major exporter stocks may be declining, but the US has yet to capture export market share. Export shipments were shown at 344,899 MT in the week ending August 2, which was down 10.8% from last week. US Wheat ending stocks are expected (per survey) to be down 18 mbu in the USDA report to 967 mbu. Strategie Grains cut their EU wheat production estimate by 4.7 MMT to 127.7 MMT, suggesting USDA could make further cuts to their EU forecast. Japan purchased a total of 150,640 MT in their weekly MOA tender from the US, Australia, and Canada, with 49,180 MT from the US.



Live cattle futures ended the Thursday session with most contracts 37.5 cents to $1.95 lower. Feeder cattle futures were 72.5 cents to $1.30 in the red. The CME feeder cattle index was down 11 cents from the previous day on 8/8, reaching $150.45. Wholesale boxed beef values were mixed on Thursday afternoon. Choice boxes were up 33 cents at $206.06, while Select boxes were 77 cents lower at $198.09. Weekly FI cattle slaughter was estimated at 472,000 head through Thursday. That is up 5,000 head from the previous week and 9,000 head above the same week in 2017. Beef Export sales for the week of 8/2 totaled 14,560 MT, a slight drop from the previous week. Weekly beef exports hit 18,328 MT A few cash cattle sales of $110-111.50 live and $178-179 were reported in the North on Thursday.



Lean hog futures posted $2.50 to limit gains on Thursday, with nearby Aug up 17.5 cents as the exception to the rule. Preliminary open interest dropped 5,275 contracts, confirming short covering ahead of the USDA reports. The CME Lean Hog Index was down $1.47 on August 7, to $63.17. The USDA pork carcass cutout value was up 48 cents from the previous day at $71.45 on Thursday afternoon. The picnic, rib, and belly primal cuts were all reported lower. The national base hog carcass value was down $1.76, with the weighted average @$45.93. USDA estimated Week to Date FI hog slaughter at 1.772 million head through Thursday. That is down 21,000 head from last week due to plant downtime but 47,000 head above the same week last year. Pork export sales during the week that ended on August 2 were 24,871 MT. Exports were a MY low of 13,585 MT.



Cotton futures are trading 9 lower to 9 higher this morning. They were up 8 to 43 points in most contracts on Thursday, with Oct down 13 points. The weekly USDA Export Sales report showed 17,526 RB of upland cotton export sales in the last week of the 17/18 MY, with 176,600 RB in 18/19 sales. There was a total of 1.528 million RB carried over from 17/18 to 18/19. Sales for the 19/20 MY (a year from now) were shown at 39,478 RB, with 1.328 million RB in sales already accumulated for that year! Shipments in the last week of 17/18 were at 272,800 RB, with 18/19 shipments underway at 43,138 RB. The Cotlook A index was down 40 points from the previous day at 97.85 cents/lb on August 8. The weekly USDA AWP was updated to 79.68 cents/lb today, down 39 points from the previous week.






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