Ag Market Commentary

Corn futures are currently 1 to 1 higher after closing fractionally higher on Tuesday. The USDA announced a private export sale of 162,000 MT of US sorghum for 17/18 delivery to China through their daily reporting system Tuesday morning. The spread between US and Chinese prices is making feed grain imports attractive. The weekly EIA report will be released this morning at 9:30 a.m. CST, as ethanol production looks to continue the robust numbers from the past few weeks. Informa estimates the 2017/18 corn crop in Brazil at 89 MMT, down 3 MMT from their prior estimate. Safras is estimating total Brazilian corn production of 90.52 MMT for the new year.

Soybean futures are mostly 2 to 3 cents per bushel higher this morning. They settled the Tuesday session with most front contracts seeing 9 to 10 1/4 cent gains. Nearby Jan closed above $10 for the first time since mid-October, as weather issues in South America are supportive. December meal was up $5.90/ton, with nearby bean oil 5 points higher. Analysts with Informa are estimating the 2017/18 Brazil soybean crop at 110 MMT, down 1 MMT from their previous projection. Canadian soybean production is estimated at 8.1 MMT for today’s Stats Canada report, which would be 0.2 MMT lower than September but still well above 6.55 MMT last year.

Wheat futures are trading fractionally mixed this morning, excluding the soon to expire December contracts. The three markets finished Tuesday with most contracts 3 to 5 3/4 cents lower, as the US dollar was nearly 275 points higher at the wheat close. Japan is seeking 64,495 MT of US wheat in their weekly tender out of a total of 154,694 MT in Australian, Canadian, and US wheat. Results are expected on Thursday. Russia’s IKAR is estimating the country will export 35.3 MMT of wheat in 2017/18, 1.3 MMT higher than their previous estimate. Argentina’s wheat production is estimated at 18 MMT according to Informa analysts, up 0.3 MMT.

Live cattle futures showed weakness into the close on Tuesday, as most contracts were 15 to 87.5 cents lower with nearby Dec up a nickel. Feeder cattle futures were down sharply $1.375 to $2.125 in the front months. The CME feeder cattle index on December 4 was down 39 cents to $156.30. Wholesale boxed beef values were higher on Tuesday afternoon. Choice was up 89 cents at $209.08, with select $1.09 higher at $186.63. Estimated WTD FI slaughter was at 239,000 head through Tuesday, 1,000 above last week and 10,000 head larger than the same week last year. This week’s online FCE auction shows just 5 lots totaling 653 head of cattle for sale this morning. The past two weeks have shown no completed sales.

Lean hog futures ended Tuesday with losses of 10 cents to $1.175. The CME Lean Hog Index for 12/1 was up 66 cents to $63.92. The USDA pork carcass cutout value was 84 cents higher at $84.78 in the Tuesday afternoon report. The belly was the only cut reported lower. The national base hog price was 29 cents higher at $59.43. The IA/MN region cash hog average was 53 cents higher, with the WCB up 54 cents. The USDA FI hog slaughter was estimated at 931,000 head through Tuesday. That is up 23,000 head from the previous week and 52,000 head more than last year.

Cotton futures are trading 16 to 26 points higher this morning. They settled steady to slightly lower on Tuesday. The USDA ag attach estimates Indonesian cotton imports of 3.391 million bales for 2016/17, which is up from 2.941 million bales in 2015/16. The number for 2017/18 imports is projected at 3.4 million bales. The FAS estimates that the imports from the US totaled 304,000 MT, which covers about 41.14% of the total. Online cash sales dropped to 13,170 bales reported on the Seam, as prices rose 116 points to 69 cents/lb. The Cotlook A index was up 50 points on December 4 to 83.65 cents/lb.

Market Commentary provided by:

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