Corn: Corn futures ended lower and in the bottom half of today’s ranges. March corn fell 2 cents to $3.79 ¾, and December was down 1 ½ cents to $3.92. U.S. carryover for 2019/20 is unchanged from last month at 1.892 billion bu. The forecast was 36 million bushels above the average trade guess of 1.856 billion bushels. There were two large adjustments to the balance sheet which were offsetting. USDA increased its ethanol use forecast by 50 million bushels while simultaneously lowering the export forecast by 50 million bushels. USDA made no mention of potential sales to China in its corn discussion. USDA left its feed use forecast unchanged at 5.525 billion bushels despite increasing its forecasts for pork, beef and broiler production. USDA may have to raise its feed and residual use in April after the March 31 stocks report which may also include an update on corn lost or still left in the fields. USDA left its cash price forecast unchanged at $3.85.
Soybeans: Soybean futures saw two-sided action today before settling in the upper half of the daily trading range and steady to fractionally higher. Soymeal futures closed 20 to 60 cents lower, while soybean oil posted gains around 10 points for the day. USDA slashed soybean carryover 50 million bu. from January, in a nod toward and uptick in shipments of soybeans to China as part of the Phase 1 trade agreement. The market had expected a 32 million-bu. cut. This helped the soybean market to eke out minor gains for the day, though a 2.19-MMT jump in global carryover tempered gains. USDA hiked its Brazilian soybean crop estimate by 2 MMT to 125 MMT. While estimates for the region are climbing, few expected USDA to get as aggressive as it did. This morning, Conab raised its Brazilian soybean crop estimate by 1.024 MMT, pushing its production estimate to 123.25 MMT. South American Crop Consultant Dr. Michael Cordonnier upped his bean crop estimate to 124 MMT today.
Wheat: The markets closed at the lower end of today’s ranges. March SRW fell 10 cents to $5.42, March HRW was down 4 ¼ cents to $4.68 ¼ and March Spring wheat fell 2 ½ cents to $5.31 ¼. Fund liquidation increased today across the wheat markets after USDA did not cut its estimate of world wheat carryover as some expected today despite raising its trade forecast. In fact, the agency reduced global use, mostly in response to lower feed consumption. The market was also pressured by Egypt buying about 360,000 MT of wheat from Romania and Russia as lower prices than expected. That’s a possible sign that export competition is going to be intense until weather problems develop in the Northern Hemisphere this spring. USDA lowered its old-crop wheat ending stocks forecast by 25 million bu. from last month; that’s 14 million bu. more of a reduction than traders anticipated
Cotton: March cotton futures closed up 4 points at 68.23 cents today, while December futures gained 6 points at 69.31 cents. Both contracts closed near mid-range. Today’s monthly USDA supply and demand report was given a bearish read for the cotton market, and the fact that futures prices eked out slight gains is encouraging to the bulls. USDA made no changes to the supply or demand sides of the U.S. cotton balance sheet versus last month. Traders expected USDA to trim ending stocks by 90,000 bales. USDA did, however, lower the national average on-farm cash cotton price projection by a penny, to 62 cents per pound. For 2019-20 global carryover (without China), USDA forecast 48.38 million bales--up from 46.85 million bales in January, and compares with 44.32 million bales in 2018-19.
Hogs: April lean hog futures closed down $0.85 at $64.225 today and near the session low. The bulls have faded early this week after last Friday’s technically bullish weekly high close. sis: In today’s monthly supply and demand report, USDA raised its U.S. pork export forecast for 2020 by 275 million pounds, but it made no direct reference to increased Chinese demand, noting only “expected robust global demand.” Traders this week are focused in part on the continued high hog slaughter levels so far this year. Kills are up 6.3% so far this year, but slaughter rates show start to recede soon.On the positive side, it is still very likely China will need to boost imports of U.S. pork to reduce shortages and curb prices currently near last year’s record highs.
Cattle: Cattle and feeder cattle closed lower and near session lows. April cattle fell $1.50 to $117.175 and March feeder cattle were down $1.025 to $134.675.: Cattle opened lower and pushed lower throughout the session on increased long liquidation and new selling as April fell to the lowest since September. Cash trading started at $120 in Colorado today, about $1 lower than last week with most bids still holding near $121. Choice cutout value dropped 50 cents to $208.41, which is just above the January low at $208.25. Beef prices historically make their lows in February, but traders are worried it may be later this month rather than now because of larger slaughter supplies this year and heavier market weights that have pressured chuck primal prices and beef trimmings. The good news is the Choice/Select spread appears to be bottoming and any signs of reduced market-ready cattle supplies will turn the market back to the upside for a seasonal rally into April.