AgriCharts Market Commentary

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Corn

Corn futures are currently 2 to 3 cents lower after closing Friday with most contracts 1 1/4 to 1 3/4 higher. Nearby Sep lost 2.43% on the week. Friday’s Commitment of Traders report indicated managed money backing off their net long position by another 27,271 contracts in corn futures and options trading. They had net position of +39,802 contracts as of Tuesday August 15. On Friday, China sold 494,714 MT of corn from 2013 and 2014, which was 40.25% of the more that 1.229 MMT offered. The Buenos Aires Grain exchange estimates the Argentine corn harvest at 85.4% complete. They are also indicating the Argentine producers are not intimidated by $3.30 cash corn prices and are projecting 2017/18 corn plantings at 13.3 million acres, which would be a 17 year high for Argentina.

Soybeans

Soybean futures are trading 5 top 6 cents lower this morning. They finished the Friday session with gains of 4 to 7 1/4 cents in the nearby contracts, with Sep just 3/4 of a cent lower on the week. Sep soy meal was up $1.10/ton, with nearby bean oil 40 points higher. The CFTC showed spec traders switching back to a net short position of 14,399 contracts in soybean futures and options as of Tuesday. That is a net weekly change of 27,312 contracts. Thursday’s export sales report should include private export sales announcements since last Friday of at least 489,000 MT of new crop and 60,000 MT in old crop soybeans. These have been announced under the USDA daily reporting system, China was the purchaser of 417,000 MT of that total. Safras and Mercado estimate Brazil soybean exports for 17/18 at 64.5 MMT, nearly 24% larger than in 16/17, with crush projected at 41 MMT.

Wheat

Wheat futures are mostly 1 to 2 cents lower the morning, with spring wheat futures 5 to 7 cents lower in Minneapolis. They saw fractional gains in most KC and CBT contracts on Friday, as their respective Sep contracts were down 6.06% and 5.29% since last Friday. MPLS was 1 1/2 to 2 3/4 cents lower on the day, with Sep down only 0.78% on the week. As of Tuesday, spec funds were reporting a net position of -34,236 contracts in Chicago wheat futures and options, 20,135 more bearish than the previous week. In KC wheat futures and options, they were shown to lower their net long position by 14,326 contracts to +34,609 contracts. BAGE lowered their Argentine wheat planting estimate to 13.22 million acres. Australia’s production is estimated at 22 MMT according to a private analyst, vs. the USDA’s 23.5 MMT.

Cattle

Live cattle futures settled mixed Friday as nearby contracts were lower and back months higher. Aug lost 3.05% on the week, as cash trade was weaker. Feeder cattle futures were mixed as well with Aug up 2.5 cents and other front months lower. The CME feeder cattle index was 36 cents higher than the previous day at $144.80 for August 17. Wholesale beef prices were lower again in the Friday afternoon report, with choice down $1.34 at $194.29 and select boxes $1.70 lower at $192.50. The CH/SE spread is now at $1.70. Cash sales of $110-$110.50 were reported across most regions last week, down $5 from the previous week. Weekly FI cattle slaughter was estimated at 634,000 head, 7,000 fewer than the previous week but 32,000 larger than the same week last year. The Commitments of Traders report showed managed money a little more aggressive in getting out of their net long position in live cattle futures and options this week. They lowered that position by 13,593 contracts to +81,175 as of Tuesday.

Lean Hogs

Lean hog futures ended the week with most front months a quarter to 80 cents lower and back months higher. Nearby Oct was down 3.64% since last Friday. The CME Lean Hog Index for 8/16 was 33 cents lower than the previous day at $83.70. The USDA pork carcass cutout value was $1.83 lower in the Friday afternoon report, with a weighted average of $90.14. The loin and picnic were slightly lower, with the rib down $8.90 and belly $10.98 lower. The national base hog carcass was down $2.06 at $73.34 in the PM report. FI hog slaughter is estimated at 2,332,000 through Saturday, 60,000 head larger than the previous week and up 37,000 from the same week in 2016.Argentina agreed to open their boarders to US pork for the first time in 25 years, with initial estimates a cautious $10 million per year. Spec traders added another 5,663 contracts to their net long position in lean hog futures and options as of Tuesday, to +81,149 contracts.

Cotton

Cotton futures are 25 points lower to 8 points higher this morning. They settled mostly 19 to 50 points higher on Friday. The US dollar was slightly supportive, as it was down 202 points. The USDA cotton AWP for this week is 59.70, down from 62.46 cents/lb in the week just ended. The Cotlook A index for August 17 was down 30 points at 77.40 cents/lb. Friday afternoon’s CFTC report indicated spec traders trimming their net long position in cotton futures and options trading by 4,390 contracts to +29,596 contracts as of Tuesday. China sold 23,400 MT of the 29,476 MT of cotton offered at Friday’s auction of state reserves. On the week, they sold 70.77% of the 148,237 MT offered.


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