Corn futures were neutral-higher early Monday morning after losing 2.7% last week, the largest loss for corn in a month. Abundant supplies, exports that are down, and favorable S. American conditions all weigh on the market. Ethanol production was reported the most recent week at 973,000 barrels per day, vs the prior week where production exceeded 1 million. Ethanol stocks continue to rise while margins remain poor at negative $.15 production margin. Weekly corn export sales were reported last Thurs at 803,600 tonnes, compared to the estimate of 500,000 to 700,000 tonnes. Dalian corn fell from four-month highs on Monday after China’s top leaders met last week to map out rural development plans for 2016, increasing expectations that Beijing may increase sales of its record corn stockpile. March corn futures were 0.75 cents higher at $3.6525 early Monday morning, while May gained 1 cent at $3.7175.
Soybean futures fell for the fifth straight session Monday to two-week lows as heavy rains came down in Brazil. Rains fell over the weekend in Mato Grosso, easing yield concerns in the world’s largest exporter of soybeans. Weekly soybean export sales crushed expectations at 2.069 million tonnes, compared to the expected 900,000 to 1,000,000 tonnes. Funds were net sellers of 5,000 soybean contracts last week. Brazil’s soybean planting is 96% complete vs the 98.5% average. Planting of Brazil’s first corn crop is complete. Argentina raised their estimated soybean planted area to 20.7 million hectares, up from their previous estimate of 20.6. Support can be found at the 8.54 level and resistance at 8.81. Soybean futures moved 3.75 cents lower to $8.715 early Monday, while Jan soyoil lost 43 points to 30.44 cents per pound and January meal fell $0.80 to $268.20.
Wheat futures were higher early Monday morning despite being near contract lows. Weekly wheat export sales came exceeded expectations last Thursday at 370,300 tonnes, compared to the estimates of 250,000-450,000, but still remain at their lowest since 1972. Dollar weakness may bring support, effectively making exports less expensive for foreign buyers. The U.S. dollar index has weakened four of the last five sessions. Excessive rains across the Midwest may impact winter wheat plantings, but potential damage remains to be seen. Egypt, the world’s largest wheat importer, bought Argentine wheat last week in a tender, signaling that Argentina’s new policies are helping spur exports. March CBOT wheat futures gained 2.75 cents to $4.7025 per bushel Monday, while Mar KC wheat was 2.75 cents higher to $4.7025, and March MWE climbed 3 cents to $4.98.
Live cattle futures jumped 5.5% last week as snow storms moved through the Plains, firming cash prices. Snow flurries moving through the Plains slowed movement to the market and help reduce market-ready supplies, supporting prices. Tuesday’s cold storage report showed 510.48 million pounds of U.S. frozen beef supplies, lower than the expected 534.6 million. Choice cuts were up 2.80 to 194.33, and select was up 3.52 to 187.17. Cattle slaughter for the week, was estimated at 340,000 head, compared to 338,000 head last week and 273,000 a year ago. February live cattle gained 3.00 cents to 134.80 cents/pound Wednesday, while April futures climbed 3.00 cents to 136.125. January feeder cattle advanced 4.225 cents to 162.875 cents/pound Wednesday, and March feeders lifted 4.10 cents to 160.00.
Lean hog futures firmed last week following USDA reports. The Cold Storage report, released after the close last Tuesday, showed Nov frozen pork stocks were 561.9 million pounds, the highest for the month since 1915. Supplies were down 7% from October but 14% higher than last year. Pork bellies were up 131% from last month and up 15% from last year. Wednesday’s Hogs and Pigs report was neutral to slightly positive as most of numbers reported by the USDA were under the trade’s average estimates. Heavy weight hogs were shown to be 5% larger than a year ago while actual slaughter has been running 8% above a year ago, suggesting supplies could tighten the next few weeks. Hog slaughter last week was estimated at 1,516,000 head, vs 1,758,000 last week and 1,055,000 a year ago. February futures closed 0.875 cents/pound higher at 57.750 cents/pound Wednesday, while April hogs gained 0.90 to 63.70.
Cotton futures were higher Wednesday as the US dollar weakened. India’s government purchases of cotton are set to plunge 89% in 2015/16 as local prices have surged after crop failures force neighboring Pakistan to raise imports from India, the world’s largest cotton producer. Increases in exports to Pakistan, Bangladesh, and Vietnam, will help India trim spending by $2B. Globally, cotton stocks remain extraordinarily high at 104 million bales (480 lb.), or nearly 50 billion pounds of cotton. That’s enough to make 127 billion t-shirts, or 17 for every person on earth, according to estimates from the National Cotton Council. This is driven by China’s stockpiling program, which has their stocks accounting for nearly 60% of world supply. Mar cotton moved .12 higher to 63.78 cents/pound early Monday, while May cotton gained 0.12 to 64.47 cents/pound.