AgriCharts Market Commentary

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Corn

Corn futures are trading 5 to 8 cents lower this morning, ignoring the bullish aspects of unexpectedly large Cattle on Feed numbers and limited weekend rainfall. Bears will point to a cooler temperature forecast for some key pollination areas this week and for a seasonal tendency to sell off into August 1. Corn closed Friday with losses of 7 to 11 1/4 cents in most contracts. September did gain 3 1/2 cents on the week. Recent bulls were cashing out rather than risking gains over the weekend. Friday afternoon’s CFTC Commitment of Traders report indicated that spec traders had added 3,706 contracts to their net long position of 104,670 contracts in corn futures and options trading. Consultant Informa dropped their 2017 US corn yield projection to 166.2 bushels per acre, down 3.5 bpa from their previous estimate, with production at 13.9 billion bushels. On Friday, China sold 1.873 MMT of 3.366 MMT of 2013 and 2014 corn offered at an auction of state reserves.

Soybeans

Soybean futures are showing losses of 18 to 20 cents per bushel to start the week, gapping lower on Sunday night with little buying interest. They settled steady to 4 3/4 lower on Friday, on pre-weekend profit taking. Aug ended the week up 2.02% since last Friday. Front month soy meal was 80 cents/ton lower, with Aug 17 soy oil 17 points in the red. Managed money added 19,303 contracts to their net long position in the week ending July 18, taking it to 38,351 contracts in soybean futures and options trading at that time. The Argentine Ag Ministry lowered their 2016/17 soybean production estimates to 55 MMT, down 2MMT from their previous projection.

Wheat

Wheat futures are currently 7 to 8 cents lower in all three markets. They posted 5 to 7 3/4 cent losses in most KC and CBT contracts, as MPLS was 9 to 12 1/4 cents lower in most contracts. The Sep contract in KC was down 3.41% on the week, with CBT 2.25% lower, as MPLS saw gains of 1.02%. Spring wheat yield for 2017 was lowered 2.2 bpa to 38.1 bpa by Informa on Thursday afternoon, with their production estimate dropping 23 mbu to 400 mbu.. In CBT wheat futures and options, spec funds lowered their net long position to 35,926 contracts, a drop of 8,759 contracts in the week ending July 18. The US ag attach in Australia lowered their wheat production estimate for the crop to be harvested this fall to 22 MMT, 1.5 MMT lower than the latest WASDE projection due to dry weather.

Cattle

Live cattle futures finished 7.5 to 55 cents higher on Friday. Feeder cattle futures were also 50 to $1.10 in the green on Friday. The CME feeder cattle index was up $1.81 on July 20 to $149.03. Wholesale beef prices were lower in the afternoon report, with choice boxes down 74 cents at $206.91 and select 78 cents lower at $194.80. Weekly FI cattle slaughter was 622,000 head 25,000 above the same week last year. Cash trade was steady @ $119.50 to $120.50 across most regions. The USDA showed Cattle on feed July 1 at 10.821 million head, a 4.49% jump over last year, with June placements of 1.77 million head 16.07% larger than 2016. Both of those were well above the trade guess. June marketings were lower than expectations at 1.989 million head, up 4.03% from last year. The Cattle Inventory report indicated all cattle and calves at 102.6 million head, 4.5% larger than the last July report in 2015. The Beef cow inventory was at 32.5 million head, 6.6% larger than 2015, with heifers for replacement down 2.1% from two years ago at 4.7 million head.

Lean Hogs

Lean hog futures ended Friday with nearby contracts steady to 97.5 cents lower and back months higher. The CME Lean Hog Index for 7/19 was 40 cents lower than the previous day at $92.00. The USDA pork carcass cutout value was $1.24 lower in the Friday afternoon report, with a weighted average of $102.78. All primal cuts were lower, with the butt down $5.94. The national base hog carcass price was 88 cents lower with a weighted average of $83.33. Weekly FI hog slaughter was estimated at 2,213,000 head, 18,000 head more than the previous week and 72,000 more than the same week in 2016.

Cotton

Cotton futures are trading 4 to 24 points lower this morning. They ended Friday with losses of 40 to 56 points, despite the US dollar index dropping 332 points to the lowest reading in over a year. Much of northern TX, AR and eastern OK was missed by rain over the past 7 days. The Southeast has seen better coverage, but still at 50% of normal excluding areas closer to the coast. Managed money specs were shown to decrease their CFTC net long position for the ninth week in a row, to 17,363 contracts. This is their smallest net long position in 15 months. The AWP through Thursday is 64.87 cents/lb, down 60 points from the previous week. The Seam showed light cash sales of 352 bales at 67.5 cents/lb.


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