Corn futures were fractionally higher Thursday morning, after a generally neutral WASDE report Wednesday. In the report, 2015/16 U.S. corn ending stocks were revised 25 million bushel higher than the November forecast, resulting from a 50 million bushel cut in the export forecast, slightly offset by 25 million bushel increase in corn for ethanol. Expectations for weekly corn export sales due out this morning are 450,000-600,000. The US dollar is higher this morning to 97.82 after falling dramatically from the 13-year highs reached on Dec 2 of 100.51. Looking ahead, the trade continues to weigh the Fed’s expected rate hike, expected revisions higher to U.S. production in Jan, the WTO’s $1B ruling against U.S. meat, corn exports, and the new Argentine government taking office today. The EPA’s higher RFS mandate, S. American weather, and record Chinese ethanol demand could prove supportive. March corn futures moved 0.75 cents higher to $3.745 early Thursday morning, while May gained 1 cent to $3.8025.              

After closing the day flat following the WASDE report Wednesday, soybeans futures were a bit lower Thursday morning. No changes were made to the U.S. soybean supply and demand, leaving 2015/16 ending stocks unchanged at 465 million bushels and exports steady at 1.715 billion bushels. Argentina exports were revised only .5 mmt higher. Today, Argentina’s new leaders take office, promising to reduce by 5% the soybean export tax to 30%. How they handle they handle a potential devaluation of their Peso will be pivotal to whether farmers sell and in what quantities. Weekly soybean export sales estimates are 700,000-1,000,000 tonnes. Wednesday, funds were estimated to be net sellers of 3,000 soyoil contracts and net buyers of 2,000 soymeal contracts. South American weather remains favorable for growing, though key weeks lay ahead that will be watched. January soybeans were 1 cent lower to $8.7575 ealry Thursday, while Jan soyoil lost 16 points to 30.96 cents per pound and January meal climbed $0.3 to $277.30.              

USDA updated its US and global supply and demand estimates for December today. The report kept its US balance sheet unchanged. The only changes for US wheat was offsetting export changes to the 2015/2016 Hard Red Winter and Hard Red Spring volumes. Production was left at 2.052 bil bushels. While ending stocks remained at 911 mil bu from last month, likewise exports maintained at 800 mil bu. Global wheat production is 734.93 mil tonnes vs 732.98 mil tonnes. Surprisingly, USDA left Australia alone. On Tuesday, Abares cut wheat exports by 580,000 tonnes based on unfavorable spring conditions. The new projection for global 2015/16 ending stocks is at 229.86 million tonnes compared to 227.30 million in November. USDA raised foreign exports by 1.3 mil tonnes. The increase in foreign exports is in line with larger supplies expected from policy changes in Argentina and stronger demand for imports. Wheat prices traded higher across all three markets as investors had expected an increase in US ending stocks. Technical buying or short covering supported wheat prices. Surprisingly, Trade estimates expected an increase of US ending stocks offset by a decrease in exports. March CBOT wheat futures gained 8 ¼ cents to $4.89 ¾ per bushel Wednesday, while Mar KC wheat gained 8 cents to $4.80 ½, and March MWE climbed 4 ½ cents to $5.09 ½.              

Nearby cattle future were still in search of a bottom Wednesday, sharply lower for the third day, despite higher cutout values. Boxed beef cutouts were mixed with choice down 0.62 to 203.52 and select up 0.02 to 190.75. Cattle slaughter for the week was at 335,000 head, compared to 323,000 last week and 336,000 a year ago. Last week’s slaughter was at 560,000 head, 0.6% lower than a year ago. Beef demand has a small upside window between Thanksgiving and Christmas before weakening into the New Year. February live cattle lost 3.00 cents to 124.07 cents/pound at the close Wednesday, while April futures lost 3 to 125.05. January feeder cattle plunged 4.50 cents lower to 153.85 cents/pound and March feeders declined 4.50 cents to 149.350.

Nearby lean hogs followed Tuesday’s buying strength and closed higher on Wednesday. Country hog prices moved 0.19 higher to 51.46 and the lean hog index fell .08 to 56.22. Carcass value rebounded on strength in loins (+$0.94), butts ($0.02), picnics ($1.50), hams (+$0.42) and bellies (+$1.14). Ribs were $1.53 lower. Pork cut-out: $72.66, up $0.56. CME cash lean 12/07: 56.32, up .10. While the opportunity for pork to gain holiday meat market share still exists, large supplies have so far outweighed even the record decrease in pork stocks from the October cold storage report. Selling psychology may continue to have a near-term impact on the trade after the World Trade Organization (WTO) granted Canada and Mexico more than $1 billion in retaliatory tariffs against the U.S.  following a seven-year dispute over country-of-origin-labeling (COOL). Hog slaughter for the week was at 1,316,000, compared to 1,313,000 last week and 1,291,000 a year ago. February hog futures closed up 0.775 cents higher to 59.150 cents/pound, while the April contract gained 0.75 to 63.10cents/pound.

USDA adjusted cotton production today. Production is forecasted at 13.0 mil 480 lb bales, down 2% from last month and down 20% from last year. This is due mainly to lower production in North and South Carolina. Domestic milling remained unchanged, yet exports were reduced 200,000 based on lower available supply and lagging sales today. Yield is expected to average 768 lbs per harvested acre, down 70 lbs from last year. Global projections show lower production, consumption and ending stocks compared to November. Global production is down 1.9 mil bales. Projected world trade is up 1.0 mil bales. World ending stocks are now projected at 1.7 mil bales down from last month’s 104.4 mil bales projection. ICE cotton futures closed higher Wednesday. Mar cotton closed up 0.41 at 64.85 cents/pound, while May cotton gained 0.33 to 65.54 cents/pound.