Ag Market Commentary

Corn futures are currently fractionally lower after seeing slight gains on Tuesday, as most contracts were fractionally to 1 1/2 cents higher. The average trade guess for US corn ending stocks ahead of Thursday’s monthly USDA report is 2.313 bbu. That would be a reduction of nearly 39 mbu from February and bring it closer to the 16/17 carryout of 2.293 bbu. Analysts on average are expecting Brazil production to be trimmed 3.4 MMT to 91.6 MMT and Argentina at 36.5 MMT, down 2.5. The weekly EIA report will be released on Wednesday, with last week’s report showing daily production of 1.044 bpd for the week of 2/23. South Korean mills and processor groups purchased 60,000 MT and 136,000 MT of optional origin corn in separate tenders on Tuesday.

Soybean futures are trading 2-3 cents lower this morning in the old crop contracts, while November is fractionally higher. They ended Tuesday with 2-3 cent losses in the nearby months, while new crop contracts were steady to 4 cents higher. Nearby Soymeal futures were down $4.80/ton, with front month soy oil up 29 points. Analysts are expecting that the USDA will leave the US ending stocks number at 530 mbu in Thursday’s March WASDE report. The range of traders’ estimates is from 490 to 590 mbu. Brazilian production is expected to be raised 1.9 to 113.9 MMT, as that is estimated to be more than offset by a 5.5 MMT drop in Argentine production to 48.5 MMT. Some trade estimates are as high as 117 MMT for Brazil, however.

Wheat futures are fractionally mixed in all three markets this morning. They settled with fractional to 2 1/4 cent losses in most CBT contracts yesterday, as KC was down 2 to 4 1/4 cents. MPLS was steady to 4 3/4 cents higher in most contracts as the spreads corrected. Analysts are expecting to see the old crop US ending stocks number slightly higher at 1.015 bbu in Thursday’s USDA WASDE report. Egypt’s GASC purchased 175,000 MT of Russian wheat in this morning’s tende for mid April delivery. Prices were a little lower than some sources had predicted. Taiwan is seeking 92,465 MT of US wheat for April/May delivery, with the tender to close March 13.

Live cattle futures ended the Tuesday session with losses of 5 to 67.5 cents in the nearby contracts. Feeder cattle futures were 10 to 85 cents lower, with a few back months slight higher. The CME feeder cattle index was down 19 cents on March 3 at $145.25. Wholesale boxed beef values were higher on Tuesday afternoon. Choice boxes were up 12 cents at $223.35, with Select boxes $0.36 higher at $215.20. Estimated FI cattle slaughter was 234,000 head through Tuesday, even with last week and 3,000 head larger than the same week in 2017. A few cash sales of $126 were reported on Tuesday. Wednesday’s FCE online auction is showing 474 head of cattle offered for sale, mainly from KS and TX.

Lean hog futures finished the Tuesday session with most contracts 40 cents to $1.50 in the red. The CME Lean Hog Index on March 2 was down 40 cents from the previous day to $67.69. The USDA pork carcass cutout value was $1.70 lower at $77.92 in the Tuesday afternoon report. The belly primal was down $7.46. The national base hog weighted average price was 16 cents higher at $62.51. The USDA estimated week to date FI hog slaughter at 910,000 head. That is up 5,000 head from the previous week and 26,000 head more than the same time last year.

Cotton futures are 24 lower to 21 higher this morning. They showed sharp losses in most nearby contracts on Tuesday, with deferred months slightly higher. Last week’s Cotton On Call report showed mills getting out of the rest of their unfixed call sales for March during the week of 2/23. Their unfixed sales for May totaled 33,641 contracts on that date, with the total for all months at 141,824 contracts. Trade guesses ahead of Thursday’s USDA report show 17/18 exports 390,000 bales above the February projection at 14.89 million bales. The Cotlook A index was up 25 points from the previous day on March 5 at 91.45 cents/lb. Cash sales on the Seam were reported at 20,314 bales, with prices averaging 75.09 cents/lb.

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