Stewart-Peterson Market Commentary

Closing Commentary - February 23, 2018

Top Farmer Midday Update 2-23-18

CORN: Corn futures have been mostly steady all morning in light volume and were recently down 1/2 to 1 cent, putting May corn at 3.65-3/4 and Dec at 3.96-3/4. These have been pivotal price levels the past 1-1/2 weeks, as the recent price rise off of the January 12 contract lows stalls. Meanwhile, managed money is almost even while holding an estimated 1,000 short corn contracts coming into today. This morning’s USDA Weekly Export Sales were 1.56 mil tons, exceeding trade estimates, but were down 21% from the previous week and 12% from the prior 4-week average. Another export sale was announced showing 115,000 tons of 2017-18 corn going to an unknown destination. More notable, USDA Ag Forum projections include: The 2018-19 corn crop at 14.390 bil bu vs 14.604 bil 2017/18; Yield at 174.0 bpa vs 176.6 last year; and 2018-19 ending stocks at 2.272 bil bu vs 2.352 bil in 2017-18. Crude has turned higher, and is trading up 43 cents. The dollar is up 20 points.

SOYBEANS:Soybean futures are firm with May up 3-3/4 cents to 10.47, after matching Monday’s high at 10.50 in the overnight session. Nov is up a penny to 10.28-3/4 about 4 cents off Wednesday’s new contract high at 10.32-1/2. This morning’s USDA Weekly Export Sales saw net sales reductions of 109,100 metric tons for 2017-18 - a marketing-year low - down noticeably from the previous week and from the prior 4-week average; 220,000 tons were reported for 2018-19 marketing year crop; and USDA, this morning, said 106,000 tons of beans were sold to an unknown destination for 2018-19. Updated South American weather forecasts show southwestern Argentina not getting nearly as much rain. The precipitation in central areas will be erratic benefiting some areas more than many others. Brazil has the opposite problem versus Argentina - too much rain keeping the harvest pace at a crawl. The USDA Ag Outlook Forum projects the 2018-19 soybean crop at 4.32 bil bu vs 4.382 bil in 2017-18; yield at 48.5 bpa vs 49.1 last year; and ending stocks 460 mil bu vs 530.

WHEAT: Wheat futures are mixed, with May CBOT wheat up 3/4 cent to 4.65; May KC wheat down a penny to 4.85-1/4. Both contracts have lost ground this week, losing about a dime, including a lower start to the holiday-shortened trading week. Yesterday’s acreage projections appeared to have little effect on the markets, and may have provided some minor support to wheat in early trade. The global wheat market is expected to see the first drawdown in stocks in six seasons in 2018-19 with production forecast to fall, the International Grains Council said. USDA Weekly Export Sales came in at 328,900 tons, within trade estimates. The figure was up 6% from the previous week, but down 7% from the prior 4-week average.

CATTLE: Cattle futures are mostly lower with some contracts slumping to new lows for the week. Nearby Feb live cattle contracts expire on February 28 and are down .650 to 127.700, while taking cues from this week’s $128/cwt cash trade, $2.00 lower than last week. Apr is down .7800 to 124.575, and Mar feeders are down .375 to 145.625. Trade estimates for this afternoon’s COF report show February 1 On Feed at 107.4; little-to-no change in placements vs a year ago; and Marketed at 105.9. Thursday’s Cold Storage report was viewed as friendly for the complex.

HOGS:Hog futures are flat/weak after posting fresh two-week highs earlier in the session. Apr hogs are down .125 to 71.150. Jun hogs are off .100 to 77.325. Today’s cash markets, called steady to $1.00/cwt lower, along with lethargic pork values have failed to strengthen with futures this week.

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