Corn futures were neutral-lower at dawn of week’s end, having traded above the 20-day moving average for seven consecutive days now, a feat not accomplished in eight weeks. Higher weekly corn export sales for last week helped boost the sales pace to just 15% under last year’s pace, compared to the USDA’s benchmark of 7% year-over-year decrease. However, this may be overshadowed by January’s projected increase in the crop production final, based on historical revision trends. Still, strong El-Nino conditions that are expected to persist through the winter as well as potential for a weather story in S. America will help undergird prices. The Chinese Yuan has hit 6.4558, falling to its lowest value against the dollar since mid-2011, surpassing even the surprise devaluation of Aug 11. March corn futures moved 0.75 cents lower to $3.785 early Friday morning, while May lost 0.5 cents to $3.8375.
On the heels of a strong soybean export sales report and a daily announcement of sales of 120,000 of soybeans, futures firmed Friday morning, though prices are down for the week after the 23 cent drop on Monday. Prices are set to face the biggest weekly loss in four months. The WASDE report showed only relatively small increases in the forecast for Argentine exports, despite the new regime taking office. Brazilian agency CONAB has raised its 2015/16 soybean production estimate to 102.5 million tonnes and they have forecast 57.5 million tonnes for soybean exports, compared to 55 million last week. The El-Nino pattern remains the strongest on record, NOAA says, also giving La-Nina a 31% probability between Jul-Aug ’16. January soybeans were 2 cents higher to $8.8025 early Friday, while Jan soyoil lost 5 points to 31.74 cents per pound and January meal climbed $1.8 to $275.30.
Wheat futures gained Thursday on technical buying and short covering despite a stronger US dollar. Carry over from Wednesday’s report supported prices. Wheat prices across all markets were up Thursday despite several bearish events. Today, the wheat market sustained bearish export data, stronger data, and weaker fundamental developments in Argentina and Ukraine. USDA released the latest export data Thursday. USDA reported net sales of 8.3 mil bu for delivery in the marketing year 2015/2016, down 43% from the previous week and 45% from the prior 3 weeks average. Exports were reported at 7.9 mil bu down 46% from the previous week and 31% from the prior 4 week average. Both are well below trade estimates. Short covering from Wednesday’s report shrugged off today’s bearish export data. Bearish news out of Ukraine shows recent rains have improved the prospects for next year’s wheat crop. The Ukrainian agriculture ministry now expects the 2016 grain harvest to more than 61 mil tonnes compared with an earlier forecast of 60.5 mil tonnes. Winter wheat improved conditions with just 17% in poor condition vs last reported 30%. Wheat’s near double-digit rally post-WASDE was met with slightly weaker futures early Thursday morning. The lower dollar coupled with U.S. wheat exports that weren’t revised lower from 800 million bushels helped wheat higher. The resulting steady U.S. ending stocks of 911 million bushels was deemed supportive against the expect 918 million bushels. Conversely, world wheat ending stocks were revised 2.56 mmt higher to 229.86 mmt, a 1% increase. Funds were net sellers of an estimated 4,000 contracts Wednesday. March CBOT wheat futures gained 5 ¾ cents to $4.95 ½ per bushel Thursday, while Mar KC wheat gained 9 ¼ cents to $4.89 ¾, and March MWE increased 5 ¾ cents to $5.15 ½.
Cattle futures found support and recovered losses Thursday. Short covering was the focus of today’s bounce after futures slid to their lowest levels in 2 ½ years on slow demand. Retail orders of steaks, roasts, and other beef cuts tend to rise ahead of the end of year holidays. Pressuring prices are the lower prices in alternative meats such as pork and poultry. Cash cattle prices have dropped this past week 5-7 cents below prices paid by beef packers to fil retail orders, further driving the idea of slowing demand. Boxed beef cutouts were higher with choice up 0.11 to 203.19 and select up 0.08 to 190.08. Cattle slaughter for the week was at 447,000 head, compared to 433,000 last week and 448,000 a year ago. February live cattle gained 1.95 cents to 126.10 cents/pound at the close Thursday, while April futures gained 1.475 to 127.10. January feeder cattle gained 1.90 cents lower to 152.525 cents/pound and March feeders gained 1.80 cents to 151.60.
Nearby lean hogs closed lower on profit taking from previous sessions gains on Thursday. Country hog prices moved 0.14 higher to 51.63 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. Hog slaughter for the week was at 1,754,000, compared to 1,750,000 last week and 1,722,000 a year ago. February hog futures closed down 0.025 cents to 59.225 cents/pound.
Cotton futures closed lower Thursday. Push back was seen as profit taking as the futures reached a technical signal of being over bought after the March gained more than 5% since November 23. Wednesday’s WASDE’s ending stocks was supportive helping the market reach its peak. Production was forecast at 13.03 mil (480 lb bales), down 2% from last month and down 20% from last year, 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 and down 14 pounds/acre from their Nov estimate. 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. Mar cotton closed lower 1.06 to 63.75 cents/pound, while May cotton lost 1.04 to 64.52 cents/pound.