AgriCharts Market Commentary

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Corn

June 18, 2018

Corn futures are trading 3 to 4 cents lower at the moment. They closed with most nearby contracts 1 to 2 cents lower on Friday, despite showing gains at midday. Front month July lost 4.37% on the week. Heavy rains are expected in much of the Corn Belt over the next week, adding pressure to the market. Managed money spec funds slashed their net long position by 77,383 contracts in the week of 6/12. On that date, they were net long just 36,216 contracts. Total export commitments for corn are now 96% of the newly updated USDA projection, vs. the average at 98%. China sold 779,680 MT of corn at an auction of state reserves on Friday, which represented 19.5% of corn available.

Soybeans

June 18, 2018

Soybean futures are currently steady to 2 cents in the red, since ending the Friday session with strong losses in the last hour of trading. Pre-weekend short covering was met with news that China is planning to place tariffs on US beans late on Friday. Front Month soy meal was down $4.30/ton, with soy oil a sharp 64 points lower. China responded to President Trumps decision to go ahead with tariffs by implementing 25% tariffs on $50 billion of US goods. Duties on $34 billion, including soybeans, will go into effect on July 6. Friday's monthly NOPA crush report that indicated a May record 163.572 mbu of soybeans were crushed by its members. That was 9.6% larger than last year and 1.6% above April crush, but short of most estimates. Soy oil stocks at the end of May were shown at 1.856 billion pounds, well below most expectations and an 11.3% drop from April.

Wheat

June 18, 2018

Wheat futures are mostly 6 to 8 cents lower in the winter wheat contracts this morning. MPLS is steady to a penny lower. They saw losses of 2 to 4 cents in most nearby winter wheat contracts, with MPLS down 6 to 8 cents on Friday. On the week, front month KC was down 3.44%, with Chicago 3.94% lower and MGE 3.67% in the red. As of the first week of the 18/19 MY, US wheat export commitments (shipments and unshipped sales) are at just 4.526 MMT. That is down 31.5% from the first week in the 17/18 MY, as demand for new crop US wheat has been sluggish. The managed money net long position in Chicago wheat futures and options was cut by 1,383 contracts in the week ending 6/12, with the net position at 14,903. They continued to add to their net long in KC wheat to 61,091 contracts. Following last night’s report that unapproved GMO wheat was found in Alberta, a Canadian providence, Japan suspended its tender and sale of wheat from Canada. South Korea followed suit over the weekend.

Cattle

June 18, 2018

Live cattle futures finished the Friday session with strong gains, as Aug flirted with limit up. Feeder cattle futures were also sharply higher, up $3.075 to $4.30 in the front months. The CME feeder cattle index was at $140.73 on June 13, up 3 cents from the previous day. Wholesale boxed beef values were mixed on Friday. Choice boxes are down 49 cents to $221.59, with Select boxes 76 cents higher at $202.73. The Ch/Se spread narrowed $4.17 on the week to $18.86. USDA weekly FI cattle slaughter was estimated at 654,000 head through Saturday. That is now 4,000 head below last week as packers are expected to pick up a few head on Saturday. A few $113 bids were reported late on Friday, with some scattered trade reported at that price. Managed money spec funds in live cattle futures and options added 9,278 contracts to their net long position to 23,271 contracts as of Tuesday.

Lean Hogs

June 18, 2018

Lean hog futures settled with 30 to 40 cent losses on Friday, with nearby July up a dime. The CME Lean Hog Index was up another $1.38 to $80.09 on June 13. The USDA pork carcass cutout value was up $1.69 on Friday afternoon at $84.09. The butt was the only primal cut reported lower. The national base carcass price averaged $82.87, up $1.20 from the previous day. The USDA estimated week to date hog slaughter at 2.215 million head through Saturday. That is 56,000 head lower than the previous week on lighter Saturday slaughter. Managed money was shown to trim their net short position in lean hog futures and options by 5,045 contracts as of Tuesday to -4,153 contracts.

Cotton

June 18, 2018

Cotton futures are trading 198 to 226 points lower in the front months, after posting losses of 269 to 311 points in most contracts on Friday. Trade issues and Specs taking profits are adding to the selling pressure. Nearby July was down 4.44% on the week. China retaliated to Friday’s announcement on US tariffs by placing tariffs on $50 billion of US goods, including cotton. The Cotlook A index was down 25 points from the previous day at 101.45 cents/lb on June 14. The weekly AWP was updated to 82.99 cents/lb on Thursday, 172 points above the week prior. Friday’s CFTC data showed managed money trimming the cotton net long position by 788 contracts to a net position of 88,911 contracts as of Tuesday.


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