Today was a day of waiting for the long holiday weekend and the outcome of this week’s trade talks between the US and China. Position squaring ahead of the weekend was the theme through the commodities markets today. Ag markets are closed Sunday and Monday. Trade resumes Monday evening at 7 PM CST.
- NOPA soybean crush for January 2019 was reported at 171.630 million bushels, meal stocks at 905,923 tons and oil stocks at 1.549 billion bushels.
- The next Cattle on Feed report is scheduled for Friday, February 22nd at 2 PM CST.
- Energy markets were stronger with crude oil trading above $55/barrel.
- The US$ backed off to just below 97 points and the gold market was 10-11 bucks higher at $1,321.
- Wall Street is stronger on the day with the DJIA up 461 at 25888, S&P up 33 at 2782 and the NASDAQ up 45 at 7472.
The corn market traded mixed but managed to eek out an unchanged price in the March. Spring planting ideas have begun to surface with talk of having more acres planted over last year. Prices drew support from good exports and hopes for Chinese corn business.
- Closes: March at $ 3.74 ¾, unchanged, July at $3.90 ¼, down ¼ cent, December at $3.99 ¼ unchanged.
- Thoughts are that we could see an additional 2.5 million acres planted this year.
- USDA announced the sale of 205,744 tonnes of corn to unknown destinations for the 2018-19 marketing year.
- SAFRAS pegs Brazil’s 2nd (Safrinha) crop at 62.8 mmt, up from their previous estimate at 62.009 mmt.Their total corn crop is estimated at 93.305 mmt versus 93.366 previously.
- Spreads: H/K 8 ¼ carry, N/U 3 ¼ carry, Z/H 9 ¼ carry, Z/N 19 ¼ carry.
The soy complex traded higher on trade talk optimism and technicals. Prices drew additional support from a higher than expected soybean crush number for the month of January. Weather conditions for the weekend and next week is expected to be beneficial to the South American soybean crop.
- Closes: March at $9.21 ½, up 3 ¼ cents, July at $9.35, up 3 ¾ cents, November at $9.52, up 4 cents. The products were stronger with meal up a buck and oil up 6 points.
- The March contract rebounded after dipping down to its 100-Day MA of $9.01 ¼.
- SAFRAS pegs Brazil’s soybean crop at 115.4 mmt. this compares to their previous estimate at 115.718 mmt. The USDA’s last estimate was at 117.0 mmt.
- The canola market was on the defensive from technical selling and dwindling buying interest.
- Spreads: H/K 14 ¼ carry, N/X 16 ¾ carry, X/N 27 ¼ carry.
The wheat market faltered on technical selling and weaker global wheat prices. The KC market continued to make contract lows with the Chicago market not far behind. Algeria bought wheat at nearly $15/tonne less than what they did in January.
- March closes: Mpls at $5.73, down 1 ¾ cents, KC at $4.76 ½, down 5 ¼ cents and Chicago at $5.04 ¼, down 2 ¾ cents.
- EU wheat prices fell on positioning ahead of their March options expiration and technical selling, despite favorable export demand.
- Russia’s prices have retreated from the recent rally, creating some doubt that Russian wheat exports will decline going forward.
- Spreads: Mpls H/K 6 inverse, K/N 3 ¼ carry, Kansas City H/K 8 carry, Chicago H/K 2 ½ carry.
Cattle prices turned lower on a bout of profit taking ahead of the long holiday weekend. The feeder cattle market traded lower in sympathy with the live cattle market. Cash markets were not week defined this week with reports of 350 head that traded at $123.50 in Iowa. Bids are more like $124 against offers at $125-$126. We have a short trading week next week, so not so sure that the packers will be forced to pay up or not.
- Closes: March feeders at $142.60, down 1.27, April feeders at $145.22, down 1.20, April lives at $127.17, down 17 cents and June lives at $118.07, down 25 cents.
- Today’s slaughter is estimated at 111k head. Numbers appear to be coming down.
- Boxes were stronger this morning.
Hog prices bounced a bit today on firming products, but the products are still in the tank. Cash markets are seriously weak, but the retail part of the equation is still pulling in the money at many of the grocery stores. At some point there should be some sort of middle ground derived at between the product/cash prices and retail prices.
- Closes: April at $55.25, up 87 cents, and June at $76.72, up 52 cents.
- Today’s slaughter is estimated at 465k head.
- Products were stronger but remain at some pretty weak levels.