Ag Market Commentary

Corn futures are currently fractionally higher after also ending the Wednesday session within 1/2 cent of UNCH. Wednesday morning’s EIA report showed ethanol production for the week of Jan 5 at just 996,000 barrels per day. Spot ethanol futures are steeply discounted vs. gasoline due to excess inventory. Stocks of ethanol at the end of that week rose 100,000 barrels to 22.719 million barrels. Traders are estimating the USDA will show 350,000-650,00 MT in old crop export sales for the week of Jan 4. That would be an increase over last week’s MY low of 101,198 MT. Ahead of Friday’s USDA reports, analysts are expecting 17/18 world ending stocks to be trimmed nearly 1.5 MMT to 202.6 MMT.

Soybean futures are trading 1 to 1 1/2 cents per bushel higher this morning. They continued to show weakness ahead of Friday’s massive report day on Wednesday, with most contracts 8 to 9 cents lower. Meal futures were down $1.60/ton, with nearby soy oil 26 points in the red. Trade ideas for the weekly USDA Export Sales report show 17/18 soybean sales in a range of 500,000-850,000 MT for the New Years holiday week of Jan 4. The average wire service trade guess for old crop world ending stocks is running 99.06 MMT, an increase of 0.74 MMT on larger SA production. That WASDE report will be released on Friday morning at noon EST.

Wheat futures are mostly 3/4 to 2 cents per bushel lower this morning. They closed Wednesday with most contracts 1 1/2 to 3 1/2 cents higher. This morning’s USDA Export Sales report is expected to show old crop wheat sales pick up for the week of Jan 4 to 250,000-450,000 MT. Last week’s marketing year low (MY low) sales totaled just 130,963 MT. December 1 wheat stocks are expected to be shown at 1.849 billion bushels this Friday, nearly 11% lower than the same time last year. The USDA is seen reducing world ending stocks slightly to 268.1 MMT.

Live cattle futures were 30 to 90 cents lower in most contracts on Wednesday. Feeder cattle futures were down mostly 32.5 to 85 cents, with nearby Jan $1.10 lower. The CME feeder cattle index on January 9 was $151.57, down 85 cents from the previous day. Wholesale boxed beef values were lower on Wednesday afternoon. Choice boxes averaged 43 cents lower at $210.06, with Select boxes down 46 cents per cwt at $203.23. Estimated weekly FI cattle slaughter was 354,000 head through Wednesday. That is 7,000 head more than the same week last year. Cash trade was early this week with sales of $119-120 across most regions. Wednesday morning’s FCE showed sales of $119 on 401 of the 711 head offered.

Lean hog futures are $1.00 to $1.55 lower in most nearby contracts at midday. The CME Lean Hog Index was up 72 cents on January 8 at $66.37. The USDA pork carcass cutout value was down 8 cents at $79.45 in the Wednesday afternoon report. The picnic primal was down a sharp $6.46, as the belly was up $4.30. The national base hog weighted average price was up $1.87 to $69.43. The USDA week to date FI hog slaughter was estimated at 1,385,000 head through Wednesday. That is up 103,000 head from the same week last year.

Cotton futures are surging higher this morning, up 98 to 136 points and into life of contract highs. They also posted strong trade on Wednesday, with most nearby contracts showing triple digit gains. The US dollar was weaker yesterday, and again overnight. Analysts expect US exports to see another increase in Friday’s USDA supply/demand report, as total commitments are well above the average. However that could be offset by the fact that actual exports are currently lagging behind this time last year. The Cotlook A Index for January 9 was 10 points higher than the previous day at 88.80 cents/lb. Online cash sales of 23,823 bales were reported on the Seam on Tuesday, with an average price of 70.5 cents/lb, up 83 points from the day prior.

Market Commentary provided by:

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