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AgriCharts Market Commentary
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Corn futures ended the day with losses from 3 3/4 to as much as a nickel in the front month. Argentina authorized another 3.5 MMT of the 14/15 corn crop for export. The government rations corn exports out of that country to keep local supplies adequate and minimize inflationary pressures. In its Agricultural Outlook for 2015-2024, the Chinese government indicated that it expects annual corn imports will be limited to 7.2 MMT or less between now and 2024, as long as their domestic supplies are adequate. Headlines about poor quality of Chinese rice in government stocks have spurred speculation about a similar risk in their large corn stocks. There is little evidence of actual lost usability. The national average basis is about 3.5 cents stronger than it was on April 1, 2015.
Soybean futures finished the day 1 to 2 3/4 cents lower, with the May contract settling 3.5 cents off its session low. May bean meal lost $2.70 on the day, but May bean oil was 23 cents higher. The potential for Brazilian truckers to decide to go on strike later this week helped support the US bean market, although politicians are getting more involved and some pundits expect further delays before any concrete action. The Chinese Ag Outlook forecasts continued growth in soybean imports, and expects annual imports to exceed 82.66 MMT by 2024. For context, total projected Chinese soybean imports for 2014/15 were at 74MMT in the April WASDE report.
Wheat futures were steady to as much as 6 3/4 cents higher on the day. They were doing better when the USD was lower on the day, but slipped as it moved across into positive territory. Spring wheat futures were more than 6 cents higher for old crop and more than a nickel higher for new crop today, despite planting progress at 36% done vs. the average pace of 19% for this week. The trade had been expecting improvements to the overall crop condition to show up in the weekly crop progress report released on Monday night, but the Brugler500 Index was unchanged. Stats Canada is expected to update its planted area figures on Thursday with the trade looking for a slight cut in wheat area, and a slight increase in canola area.
Live cattle futures were higher on the day, recovering from two straight days of losses. Feeders also posted a rebound on Turnaround Tuesday with April settling at $212.65. The CME feeder cattle index is $217.48, down 18 cents from the prior day. Monday activity mostly consisted of collecting show lists, with a few more cattle available in NE this week but numbers in the south similar to last week. Week to date slaughter is estimated at 220K head which is dead-even with a week ago, and 1K head more than the same period a year ago. The Choice boxed beef average price was up 68 cents in the afternoon report. Select boxes were off $2.65 from Monday afternoon.
Lean hog futures posted solid gains today with the front four contracts up more than a dollar on the session. The carcass cutout price was also higher on the day, up 75 cents at $68.61. The CME Lean Hog Index for April 16 was up another 55 cents at $64.27. Cash hog base prices in the IA/MN marketing area were 22 cents lower today, and they were down 12 cents in the WCB, but no report came from the ECB. Week to date slaughter is estimated at 862,000 head, down 21K head from last week. Approximately 2.58% of the laying hens in the US will be removed from supply due to a confirmed case of avian flu in an Iowa facility. The one facility houses 5.3 million layers, and the national flock of layers was estimated to be 205 million birds as of March 1. This will put a dent in egg supplies.
Cotton futures lost between 6 and 41 points on the day, as crude oil futures lost more than a dollar per barrel on the day. Cotton planting progress is only a few points behind normal. Certified stocks for April 20 are 69,061 bales with 2,614 new certs. Friday is first notice day for May cotton futures deliveries. The Cotlook A Index is at 69.95, off 1.20 from yesterday. Sales of Pima cotton were reportedly slow last week, with weaker local spot prices. No forward contracting or domestic mill activity was reported and foreign interest was light. Cotton plants are peeking up through inches of dust in California, where at least two mills have announced they will not operate this year.