Ag Market Commentary

Corn futures are trading 1 cent per bushel higher this morning. They ended Wednesday with 13 to 14 1/4 cent losses in the front months after bearish USDA reports. The weekly EIA ethanol production was down 67,000 barrels per day @ 1.02 million bpd. Ethanol stocks rose 191,000 barrels to 22.894 million barrels. NASS updated their US corn yield number to 181.3 bpa, up 2.9 bpa from their initial August report. They now have record projected yield in most of the major Corn Belt states (NE, IA, IL, IN, OH, SD). That placed production at 14.827 bbu, with the new crop carryout up 90 mbu at 1.774 bbu. The USDA cut 25 mbu from old crop US stocks by increasing expected exports. World ending stocks for 17/18 were up 0.82 MMT to 194.15 MMT, with 2018/19 1.54 higher at 157.03 MMT. FSA data, released after the close, showed producers registering 928,157 acres of corn as prevented planting for corn through September 1, up slightly from August. Export sales in the week of 9/6 are expected to be shown at 0.8-1.2 MMT this morning.

Soybean futures are trading 2 cents per bushel lower this morning. They closed Wednesday 8 to 9 cents higher on “sell the rumor and buy the fact” action. Soymeal was up $1.50/ton, with soy oil 10 points lower. The September USDA Crop Production report indicated US national average soybean yield at a record 52.8 bpa. That pushed 2018 production 107 mbu higher to 4.693 bbu. Old crop US carryout was reduced by 35 mbu on increased crush and exports. New crop went 60 mbu in the other direction thanks to the larger production, to 845 mbu. World ending stocks for 17/18 beans were reduced by 0.87 to 94.74 MMT, while new crop was 2.32 MMT higher at 108.26 MMT. USDA trimmed Chinese 2018/19 imports to 93.5 MMT, while the Chinese Ag ministry updated their own estimated imports to 83.65 MMT. Prevent planted acres submitted as of September 6 were 275,629 acres according to the FSA, slightly above August. Traders expect USDA to show new crop soybean export sales for the week ending September 6 totaled 0.5-1.0 MMT.

Wheat futures are steady to 3 cents lower this morning, with MPLS spring wheat the firmest and Chicago the weakest. They settled with 10 to 13 1/4 cent losses in the front months on Wednesday. The USDA left the 2018/19 US ending stocks UNCH at 935 mbu. They are waiting for better small grains data in the September 28 reports. No change was made to the US export forecast despite upward revisions in the Russian production. World ending stocks for 17/18 were up 1.29 MMT to 274.36 MMT, while the 18/19 carryout number was 2.33 higher at 261.29 MMT. Russian production was back up 3 MMT to 71 MMT, with Canada down 1 MMT and Australia down 2 MMT. India was 2.7 MMT higher. Acreage data released by the FSA showed that producers had enrolled 371,772 prevent plant acres for wheat as of 9/6. That was 8,565 acres above August. Analysts are looking for USDA to show 18/19 wheat export bookings of 300,000-500,000 MT for the week of 9/6 later this morning. Egypt’s GASC purchased 235,000 MT of Russian wheat in their latest tender on Wednesday.

Live cattle futures saw 85 cent to $2.175 gains in most contracts on Wednesday. Feeder cattle futures were up $1.325 to $2.575. The CME feeder cattle index was up 54 cents on September 11 at $152.63. Wholesale boxed beef values were lower on Wednesday afternoon. Choice boxes were down $1.28 to $204.79, while Select boxes were $1.04 lower at $197.27. USDA estimated weekly FI cattle slaughter at 357,000 head through Wednesday, which is 7,000 head above the same week in 2017. The FCE online auction saw no sales on the 444 head offered, with feedlots passing on bids of $108-108.25. The WASDE report had US 2018 beef production UNCH at 27.094 billion pounds. Third quarter 2018 production was trimmed by 65 million pounds, with 4Q18 production up that same amount.

Lean hog futures posted 65 cent to $1.525 gains in most contracts yesterday. The CME Lean Hog Index was up 55 cents on September 10 to $47.55. The USDA pork carcass cutout value was $1.62 higher @ $70.86 in the Wednesday afternoon FOB plant report. The national base hog carcass value was $1.46 higher @ $47.48. FI hog slaughter through Wednesday was estimated at 1.338 million head, down 31,000 head from the same week last year as plants along the East Coast prepare for Hurricane Florence. Projected pork production for 2018 was trimmed by 35 million pounds in the WASDE report, to 26.675 billion pounds on lower third quarter production.

Cotton futures are trading 69 to 77 points lower this morning. They were 25 to 36 points lower on Wednesday. The USDA report projected 2018 US cotton yield at 895 lb/ac, down 16 pounds from August. However, a higher harvested acreage number 0.55 million ac increased production to 19.68 million bales. A larger export estimate helped to offset that with ending stocks up 100,000 bales from August to 4.7 million. New crop world cotton carryout was up 360,000 bales to 77.46 million bales. The Cotton Ginnings report indicated that 489,100 RB had been ginned as of September 1, all in Texas. That was down 14.3% from the same time last year. The Cotlook A index was up 170 points from the previous day at 93.40 cents/lb on September 11. The USDA AWP is currently 73.77 cents/lb, and will be updated later today.

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