Corn: Futures tumbled more than 1.3% and closed near session lows. March corn fell 5 ¾ cents to close at $3.76 ¼, while December corn fell 5 cents to settled at $3.99. There were few new fundamental news items to support the market today and prices fell on active long liquidation and some new technical selling. Corn was pressured by the lack of details on what China has agreed to buy from the U.S. to force a new trade deal after three days of meeting in Beijing earlier this week. With the government shut because of a lack of funding, the USDA did not release its weekly export sales report for a third consecutive week. Gulf cash basis bids remain soft and would suggest, sans any government data, that export demand is light. Brazil farmers may harvest 91.189 MMT of corn this year, the government agency Conab said Thursday. That’s up from 91.101 MMT forecast in December and 80.785 MMT produced in 2018. The lack of a cut in output was a disappointment for market bulls. Warm dry weather for the next 10 days will increase stress and may lead to lower yields in subsequent reports.
Soybeans: Soybean futures posted losses of 14 to 17 cents today and finished low-range. Meal futures were $5-plus lower. Soyoil finished near 40 points lower. Soybean futures were hit with heavy selling today as the cut to Brazil’s soybean crop wasn’t as sharp as expected and amid lacking details from the U.S./China trade talks earlier this week. Conab, the official Brazilian crop estimating agency, cut its Brazil soybean crop estimate to 118.8 MMT, but that was higher than expected and above most private crop forecasts. However, the estimate was as of Jan. 1 and conditions have worsened since then, so an additional cut by Conab is likely next month. Also, Conab typically runs behind private estimates, especially when the crop is rising or declining rapidly. Brazil-based Agrconsult slashed its Brazilian soybean crop estimate by 5.2 MMT to 117.6 MMT. Brazil-based AgRural cut its bean crop estimate to 116.9 MMT on Wednesday. Traders have grown tired of waiting on demand news from China, especially with USDA closed and no daily or weekly confirmation of sales. U.S. trade officials reiterated China would buy a “substantial amount” of U.S. ag products, including soybeans, but as we mentioned earlier this week, there’s talk China’s goodwill buying could be completed. Softening bean basis at the Gulf would suggest that may well be the case. Of course, there’s no way to confirm that without USDA data.
Wheat: Winter wheat futures ended the day down 6.5 to 7.5 cents and near their session lows. Spring wheat futures closed 6.5 to 7 cents lower. Solid losses in the corn and soybean futures markets spilled over into selling pressure in wheat futures today. The U.S. government shutdown again eliminated weekly export sales data and that void of information means market bulls lack incentives to enter the market on the long side. Also bearish for wheat today was news Egypt passed on U.S. supplies in its tender Wednesday. Still, increasing wheat tenders this week suggest buyers are looking to extend coverage as world prices continue to rise from their October lows. Jordan retendered for 120,000 MT of optional-origin wheat Thursday after yesterday passing on offers for March and April delivery. Tunisia and Morocco are also shopping. That follows Egypt buying 420,000 MT of Russia wheat on Thursday and Algeria buying 550,000 MT of optional origin supplies.
Cotton: Futures closed lower and in the bottom half of the daily trading range with March ending down 28 points at 72.85 cents. A third week of no USDA weekly export sales data continues to leave the market uncertain if the sharp break in prices last month helped to spur fresh overseas demand. The lack of any details about the size and timing of any Chinese cotton purchases that may have been negotiated during this week’s trade talks in Beijing added to the lack of buying interest today. Higher U.S. stocks and oil prices provided early support, but prices failed to hold those gains. Cotton prices remain under pressure from forecasts for U.S. farmers to increase plantings by 750,000 to 1.5 million acres this year, building U.S. inventories.
Hogs: Futures end mixed with February up 30 cents at $64.075 and April up 30 cents to $67.85. June closed down 60 cents at $81.40. Front-month futures continued to find support from stronger cash markets. Cash pigs rose for a 10th straight session on Wednesday. Midday wholesale pork prices jumped $2.08, to $71.75, the highest since Dec. 18. Gains were led by bellies, loins and butts. Wholesale movement this week has been very strong. Weekly slaughter is expected to be near 2.580 million head this week, back below 2.6 million until next fall. Still, slaughter would be up about 5% from a year ago. U.S./China trade talks are over. While the meetings were deemed successful and extended an extra day, the lack of specifics on how much ag products China has agreed to buy put some pressure on deferred futures.
Cattle: Live cattle futures closed up 7 1/2 to 12 1/2 cents in the nearby contracts, and about midrange, on a mild corrective pullback after the February hit a contract high on Tuesday. Feeder cattle futures ended down 2 1/2 cents in the January and up 27 1/2 cents in the March contract. Cattle futures are consolidating recent gains and waiting to see if packers bid more for live cattle supplies as showlists dwindle. Packer cutting margins are less than half of what they were last week at this time, but are still solidly in the black. Boxed beef cutout values were higher today, with Choice up 61 cents and Select up 58 cents, on a modest 58 loads delivered. Beef demand should hold relatively firm after companies last month created the most jobs since last February. Higher U.S. wages, reported last Friday, should continue to support domestic beef demand.