News & Commentary
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Corn futures are currently steady to fractionally mixed this morning, after closing around 4 cents higher on Monday afternoon on “variable” yield reports and ideas of storm damage in the Carolinas. The weekly USDA Crop Progress report after the close yesterday showed the US crop condition improved by one point this week. The Brugler500 Index pegged the crop at a score of 375, compared to 388 at this time a year ago. NASS reported that 86% of the US corn crop is safe from frost, ahead of the 5 year average. US corn harvest continues to be just behind schedule, at 27% completed (five year average: 32%). USDA reported a 42% week over week drop in export inspections, as 469,697 MT of corn was inspected for export during the week ending 10/1. Export inspections since September 1 are 20% smaller than last year at this time.
Soybean futures are mostly 2 or 3 cents lower this morning after advancing 9 to 10 cents on Monday. After the close, USDA reported an improved soybean condition in its weekly Crop Progress report. Our Brugler500 Index rose 4 points from last Monday to 366 (2014: 386). Soybeans dropping leaves was at 85%, two points ahead of the five year average. Harvest was 10 points ahead of the five year average schedule as of Sunday night at 42% done. The USDA Export Inspections at 1.123 MMT were down the volume from the previous week, and 12% larger than the same week a year ago. Current marketing year cumulative inspections are now actually 59,000 MT larger than a year ago. Northern Brazil is on the dry side as planting expands, while the south is plenty damp.
Wheat futures are trading steady but mixed within a couple pennies of unchanged after settling a penny to 4 cents higher on Monday afternoon. The USDA reported that 49% of the intended winter wheat crop was in the ground as of Sunday night vs. the 5 year average of 51%. Wheat emerged is also two points behind schedule, at 20% complete. Just over 557,000 MT of US wheat was inspected for export during the week ending 10/1, according to the USDA, 12% less than a week ago. YTD inspections are 1.55 MMT (56 million bushels) smaller than 2014 at this time.
Live cattle futures traded 95 cents to $1.15 lower on Monday. October closed at $122.125 after losing $10.62 last week. The USDA reported improved pasture and range conditions this week, at 44% good to excellent (last week: 43%; 2014: 50%). The CME Feeder Cattle Index for 10/2 was down $5.13 to $182.76. It is still more than $4 above futures. Cash cattle trade was inactive on Monday, but averaged $116.72 live last week, and $187.58 dressed (around a 30% decline since the week ending 1/11). The USDA reported lower wholesale beef prices in its Monday afternoon report. Choice boxes were off $1.80 to $203.97. Select boxes fell by $2.31 to $199.05, the first time under $200 since January 3, 2014. Wide retail margins for beef continue to encourage substitution of pork and poultry. Beef will have a narrow window of opportunity in October before ham and turkey come to the forefront for Thanksgiving. Limited turkey supplies might help. Estimated FI slaughter on Monday was 106,000 head, down 3,000 head from last week, and 9,000 head smaller than 2014.
Hog futures were 65 cents lower to 58 cents higher yesterday. The CME Lean Hog Index for 10/1 was 41 cents higher to 73.06. The Monday afternoon USDA report showed the average carcass cutout price at $87.17, up $1.64. Bellies gained $11.38 yesterday, to an average price of $157.69/cwt, their highest price in two weeks. Monday cash hog base prices were 15 cents higher in IA/MN, and up a dime in the WCB. Estimated FI slaughter today was 435,000 head, up 9,000 head from last week, and 8,000 head larger than the same day a year ago.
Cotton futures are currently trading from 4 to 19 points higher after finishing 150 to 173 points higher on Monday. The USDA reported the US cotton condition at 48% good to excellent as of Sunday night, down two points from a week ago, due in part to excessive flooding on the east coast. Boll opening is slightly behind the five year pace, back one point at 77% complete. Harvest is 16% done, two points slower than the average pace. USDA put the AWP for this week at 44.32, boosting the LDP/MLG to 7.68 cents per pound from 7.39 last week. The ICAC projects world ending stocks for 15/16 at 20.62 MMT, down from 21.79 MMT in 14/15, but up from its September estimate of 20.42 MMT.