AgriCharts Market Commentary

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Corn futures are trading a penny or two higher this morning after closing lower on Monday.  YTD corn export inspections are 101.6% of a year ago but a solid loading week failed to support the market against weaker crude oil and a stronger dollar.  Corn export inspections need to average about 950,000 MT per week from here to meet the USDA full year forecast. CBO budget docs have them using 89 million planted acres in 2015 with a 165 bpa yield. Sorghum export inspections  YTD are more than double year ago, leaving more room for corn feeding at home in the US. Gulf  barge basis for corn weakened by nearly 3 cents to start the week, while sorghum bids were mixed.


Soybean futures are trading steady to fractionally higher so far this morning.  The Brazilian farm consulting group AgRural says the harvest is about 3% complete, but cautioned that rain is still needed in some key areas if it is going to keep its production estimate at 95 MMT next month.  Many of the major growing areas of Argentina have ample moisture for their developing soybeans. US export inspections this week were slightly larger than last week, but off 24.39% from the total for the same week a year ago. YTD inspections are still up 197.4 million bushels (+17.7%) from a year ago.


Wheat futures are trading mixed within a couple cents of UNCH on all three exchanges.  Weekly export inspections were nothing that the market could get excited about at 263,035 MT.  That was down 16.3% from last week and well below the weekly total for a year ago.  YTD inspections are now almost 33% below a year ago.  Warm weather with highs in the 60s and lows above freezing for some winter wheat areas bears watching. Barge-based wheat bids at the Gulf were off a dime or more on the day.


Live cattle futures were mostly 10 to 80 cents lower on Monday, but the August and October contracts were 50 to 42.5 cents higher respectively.  The market remains focused on concerns about demand as pork and poultry steal center stage thanks to lower prices and especially with supermarket Super Bowl ads strongly pushing barbeque, ribs and wings. Cash cattle activity was typically quiet on Monday with the bulk of sales last week reported at $160.  The boxed beef cutout was down $2.33 at $251.41 for Choice and down $2.44 at $244.79 for Select. Monday cattle slaughter is estimated at 112K, the same as a week ago and up 4K from a year ago. The CME feeder cattle index is $210.82, down $2.84.

Lean Hogs

Lean hog futures posted triple digit gains during the Monday session.  Russia indicated an easing of pork import restrictions from some EU-27 countries, potentially opening up US exports to Asian markets currently taking the EU product. Shipping out of the West Coast has been a problem. The carcass cutout edged 9 cents higher on Monday, to $84.47, led by the rib cut. USDA estimated Monday slaughter at 435K, up nearly 10% from a week earlier when it was 396K, and also well above a year ago when it was reported at 404K.  On a live basis, cash hogs in Iowa/Minnesota averaged $68.44, down 54 cents; Western Corn Belt was at $68.03, down 83 cents; and Eastern Corn Belt was up $1.64 at $67.86. The CME lean hog index is $73.67, down 54 cents.


Cotton futures are down 11 to 27 points this morning after a triple digit gain Monday thanks to a rebound in the US stock market which suggested the consumer is still in pretty good shape and might buy some stuff! US export sales have also been surprisingly robust considering the smaller 2015 Chinese import quotas. The price differential has meant Chinese firms are taking anything they are allowed to bring in. Cotton export sales commitments are 92% of the full year USDA forecast. They would typically be 84% by this date. Crude oil futures slipped 44 cents per barrel to a new low close for the year on Monday. The US Dollar Index crept about 150 points higher on the day. Certified stocks are at 50,294, with 2,651 new certs and 5,194 bales awaiting review.

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