AgriCharts Market Commentary

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Corn

August 20, 2018

Corn futures are mostly a penny per bushel higher this morning. They were down a cent or less on Friday, with September up 1.82% on the week. CFTC data on Friday showed spec traders trimming their net short position in corn futures and options by 4,743 contracts during the ending August 14, taking it to -24,962 contracts. Total export commitments are now 99% of the USDA full year projection, with 104% the normal pace for mid-August (there are always sales that can’t be shipped rolled over to new crop). Exports are just 88% of that 17/18 estimate vs. the 93% average, as there are still 6.849 MMT in unshipped sales with just a shade over 3 reporting weeks left in the MY. China sold 850,780 MT of corn from state reserves into the domestic market on Friday, totaling 21.49% of the amount offered.

Soybeans

August 20, 2018

Soybean futures are trading 12 to 13 cents higher this morning. They had 4 to 5 cent losses on Friday after a late rally. Longs had 3.61% gains for the week. A little buying came late in the day on reports that the US and China were planning a roadmap to end the trade dispute by mid-November. That, of course, presumes that they will agree with each other’s proposals! Nearby US soy meal was down $4.50/ton, with soy oil up 8 points on Friday. Chinese meal futures sank 1.8% on Monday due to another African swine fever outbreak in Jiangsu. The large spec funds in soybean futures and options added another 2,641 contracts to their net short position as of 8/14. That took their net position to -58,924 contracts. Soybean export commitments are now lagging last year by 4.3%, slipping a little from last week. Compared to the USDA full year projection, they are 102% complete vs. the 104% normal pace. Actual exports are 94% of that number lagging average by 3%, with 4.718 MMT in unshipped sales remaining.

Wheat

August 20, 2018

Wheat futures are 5 to 8 cents lower this morning. They posted 15 to 18 1/4 cent gains in the nearby winter wheat contracts on Friday, with MPLS 10 to 12 1/4 cents higher. A weaker US dollar index provided support. Late on Friday, Mexico’s Economic minister stated that he expects a US/Mexico bilateral deal may be completed this week, about the time of the US/China meeting. Again, this statement is positioning, not a deal! Friday’s Commitment of Traders report showed money managers in Chicago wheat futures and options at a net long position of 66,948 contracts. That was an increase of 2,361 contracts from the week prior and the largest reported net long position since September 2012. They also held a net long position of 62,652 contracts in KC wheat futures and options as of last Tuesday. The Russian Ag ministry released a statement that they are not considering limiting exports as had been rumored.

Cattle

August 20, 2018

Live cattle futures ended the Friday session with gains of 75 cents to $1.60, as August was up 1.09% on the week. Feeder cattle futures were up 67.5 cents to $1.70. The CME feeder cattle index was down 70 cents from the previous day at $149.59. Wholesale boxed beef values were mixed on Friday afternoon, with the Ch/Se spread widening to $10.46. Choice boxes were up $2.28 at $211.38, while Select boxes were down 54 cents at $200.92. USDA FI weekly cattle slaughter was estimated at 660,000 head including Saturday. That is up 15,000 head from the previous week on larger weekend slaughter and 25,000 head above the same week in 2017. Cash sales of $109-110 were transacted on Friday, with a few sales of $173 dressed as well. Both were down from the previous week.

Lean Hogs

August 20, 2018

Lean hog futures saw another round of sharp gains on Friday, with most contracts up triple digits. Nearby Oct used some of the expanded limits on Friday to end the week with a 14.51% gain. Short covering is also a major market feature, with preliminary open interest dropping 6,041 contracts on Friday during the rally. African Swine Flu rolling through the Chinese hog herd is helping support the market along with hopes for more US/China talks and Mexican hints about a bi-lateral deal. The CME Lean Hog Index was down $1.02 on August 15, to $54.21. The USDA pork carcass cutout value was down 86 cents on Friday afternoon, with the average carcass value at $66.77. The belly led the way again, down $6.10. The national base hog carcass value was down 86 cents in the Friday PM report, with the weighted average @ $40.52. USDA estimated weekly hog slaughter at 2.459 million head through Saturday. That is well above last week and the same week last year.

Cotton

August 20, 2018

Cotton futures are trading 92 to 100 points higher this morning after a steep decline last week. They ended the Friday session down 30 to 41 points. December was down 4.51% for the week. The US dollar was weaker Friday, but higher in Monday morning overseas trade. Spec funds in cotton futures and options cut their net long position by 9,688 contracts to 76,672 contracts in the week ending August 14. The Cotlook A index was down 215 points from the previous day at 90.75 cents/lb on August 15. The weekly AWP was updated to 75.45 cents/lb through next Thursday, down 422 points from the previous week.


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