AgriCharts Market Commentary

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Corn

Corn futures are trading 2 to 3 cents higher this morning. They ended the Friday session with 6 to 7 1/2 cent gains in the front months, as nearby July was up 6 cents on the week. China has dropped their anti-dumping investigation into US sorghum and removed the 178.6% deposit requirement. Payments made into that fund will be rebated. Managed money was reported to trim their CFTC net long position in corn futures and options by 20,220 contracts in the week that ended May 15. Their net position stood at 191,672 contracts on that day. China sold 3.28 MMT of corn from state reserves on Friday, totaling 52.7% of the total amount offered.

Soybeans

Soybean futures are currently 18 to 20 cents higher than Friday, which they ended with 3 to 4 cent gains. Soymeal was up $1.20/ton, with front month soy oil 4 points higher. Over the weekend, Secretary Mnuchin said that the US and China had put the trade war “on hold” for now and suggested China would work to buy more US goods. This was seen by some as meaning soybeans despite recent slow consumption within China. South American consultant SAFRAS cut their second crop Brazilian corn estimate to 48.7 MMT, with the total crop at 79.02 MMT. USDA is at 87 MMT. Friday’s CFTC report showed spec funds in soybean futures and options backing off their net long position by 18,981 contracts. Their net position on Tuesday was 108,061 contracts. Palm oil prices hit a 5 week high on Friday, helping to support soy oil and vice versa.

Wheat

Wheat futures are trading 2 to 3 cents higher this morning. They saw sharp 19 to 20 3/4 cent gains in most CBT and KC contracts on Friday, with MPLS 12 to 14 1/4 cents higher. Both nearby KC and MPLS were up 4% on the week, with CBT 3.9% higher. Dryness in other major exporting countries helped, along with strength in corn. Spec traders in Chicago wheat futures and options flipped their CFTC net position by 9,848 contracts back to the short side at -5,522 contracts. In KC wheat they trimmed 4,440 contracts off their net long position to 44,190 contracts in the week ending May 15. Iraq purchased 100,000 MT of wheat in their recent tender, with 50,000 MT sourced from the US and Australia each.

Cattle

Live cattle futures posted 40 to 87.5 cent losses on Friday to end a week that saw June fall 4.85%. Feeder cattle futures were 87.5 cents to $1.425 lower, with May down 4.48% since last Friday. The CME feeder cattle index was down $1.17 on May 17 at $133.66. Wholesale boxed beef values were mixed on Friday afternoon. Choice boxes were down 47 cents at $232.21, with Select boxes 22 cents higher at $208.46. Weekly FI cattle slaughter was estimated at 660,000 head through Saturday. That is 15,000 head above last week and 48,000 head larger than this time last year. Cash trade and dropped to $114 in most regions by the end of the week. CFTC showed managed money was net long 9,091 contracts in live cattle futures and options. That was as of Tuesday, May 15, and 6,013 contracts less long than the week prior.

Lean Hogs

Lean hog futures settled with losses of 30 cents to $1.775 on Friday. The CME Lean Hog Index was up 87 cents from the previous day to $67.01 on May 16 and continues to rise seasonally. The USDA pork carcass cutout value was down $1.59 at $73.91 this afternoon. Bellies were up 12% for the week. The national base hog weighted average price was 16 cents lower at $64.89 on Friday afternoon. The USDA estimated weekly FI hog slaughter at 2.348 million head. That is a 35,000 head jump from last week and 84,000 above the same week in 2017. CFTC data showed specs increasing their net short position in lean hog futures and options by 1,239 contracts to -7,858 contracts as of May 15.

Cotton

Cotton futures are trading 200 to 230 points higher after they posted strong 79 to 152 point gains in the front months on Friday. Nearby July was up 2.28% on the week. A jump in exports is seen following Chinese commitments to import more US ag commodities if a trade deal is reached. Thursday’s CFTC cotton on call report showed mills trimming their unfixed July sales by 5,442 contracts. That position was still at 49,643 contracts on Friday May 11. The Commitment of Traders report on Friday showed large spec funds reducing their net long position in cotton futures and options by 8,605 contracts. As of Tuesday, their net position stood at 89,260 contracts. The Cotlook A index was up 45 points from the previous day to 92.50 cents/lb on May 17. The USDA Adjusted World Price for this week is 74.09 cents/lb, down 149 points from the previous week.


Market Commentary provided by:

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