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AgUpdate - Marketwatch
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CME Group Futures settlements (preliminary) 2/21
  Settle Change High Low
Mar corn 3.75 1/2 +4 3/4 3.78 1/2 3.70 1/2
May corn 3.84 1/4 +4 3/4 3.87 1/4 3.79 1/4

Dec corn

4.01 3/4 +3 1/4 4.04 1/4 3.98 1/4
Mar beans 9.11 +8 1/2 9.16 3/4 8.93 1/4
May beans 9.24 1/4 +8 1/4 9.30 1/4 9.13 1/2
Sep beans 9.46 +6 3/4 9.51 1/4 9.37
Mar soy meal 305.9 +0.7 308.8 304.6
May soy meal 309.8 +0.6 312.6 308.6
Sep soy meal 317.4 +0.6 319.9 316.2
Mar wheat 4.86 1/2 +5 3/4 4.91 1/2 4.80 1/4
May wheat 4.91 +6 3/4 4.95 1/4 4.83 3/4
Sep wheat 5.03 1/2 +5 5.08 1/2 4.98 3/4
Ethanol Futures settlements (preliminary)
  Settle Change High Low
Mar 1.344 +.017 1.350 1.318
Apr 1.362 +.017 1.365 1.334
May 1.377 +.020 1.380 1.365
         

Grains go green

Grain markets were higher on positive trade news. “The market was all a buzz this morning on talks that China has interest in buying up to $30 billion in US goods (including soybeans),” Ami Heesch, with CHS Hedging, said. “The Ag markets saw a bounce off yesterday’s lows.”

The USDA Outlook Conference also provided some support. “Support was also seen from the USDA Outlook Conference Board estimate for 2019-20 soybean acres at 85.0 mln compared to 89.1 mln last year and the average estimate of 86.1 mln for the Outlook Board release.”

Corn

Corn has received some good news, but markets haven’t been able to make a sustained move higher. “Despite what is thought to be friendly news, the March remains trapped in a 10-cent trading range,” Ami Heesch, with CHS Hedging, said.

Ethanol production continued to be down from previous weeks and last year. “Today's ethanol production for the week ending Feb. 15 was below estimates coming in at 996,000 barrels per day. This is down 3.21% vs. last week and down 6.74% vs. last year. Total Ethanol production for the week was 6.972 mln barrels."

Soybeans

Soybeans had support from a few factors. “The soybean market bounced higher, recovering from yesterday’s losses on talk of China looking to possibly buy additional US soybeans,” Ami Heesch, with CHS Hedging, said. “Prices garnered additional support from an expected 4.0 mln reduction in US soybean acreage this year.”

“Brazil's Parana state rural economy agency Deral lowered soybean production to 16.4 mln tonnes from 16.9 mln in January due to drought conditions,” the Hightower Report said. “This would be down 15 percent from last year's production of 19.2 mln tonnes. They see average yields at 45.0 bushels per acre down from 46.2 bushels in January. Harvest progress is estimated at 42 percent.”

Wheat

The China news also helped wheat markets. “Support has come from the early morning comments from the US/China trade talks with China officials proposing that it could buy an additional $30 billion per year of agriculture products which would include corn, soybeans and wheat as a possible deal is being negotiated,” ADM Investor Services said.

“The market is extremely oversold and in need of positive news after missing out on the Egyptian tender yesterday,” ADM Investor Services said. “Slumping global prices and lower freight rates have boosted global competition in the wheat trade. World wheat values have fallen over the last two weeks with French wheat the cheapest in the world."


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Grain futures prices

Links to charts

Lean Hogs CME — Close 2/21
  Settle Change High Low
Apr 55.975 +2.975 55.975 53.725
May 65.800 +2.775 66.025 64.275
Jun 75.675 +2.925 75.750 74.000
Live Cattle CME
  Settle Change High Low
Feb 127.625 -.700 128.600 127.325
Apr 128.600 -.600 129.600 128.000
Jun 119.250 -.075 119.675 118.475
Feeder Cattle CME
  Settle Change High Low
Mar 143.225 -.650 144.175 142.700
Apr 145.525 -.550 146.300 144.900
May 146.875 -.125 147.275 146.150
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Hogs reverse course

Hog markets were up after news from the U.S.-China trade talks boosted optimism. “Hog markets bounced sharply higher today on reports this morning that the U.S. and China have made significant progress for developing a framework for a possible trade deal,” Stewart-Peterson said.

Hog markets also received support from the belief that the production chain might dial back some. “There is speculation that, with the recent snowstorms in Minnesota and Iowa that the production chain speed could slow down,” Stewart-Peterson said.

Lean hogs

In weighted average negotiated prices for barrows and gilts, USDA reported;

  • National carcass base was $1.53 lower to $46.37/cwt.
  • National live was $37.66, with no comparison to yesterday
  • Iowa-Minnesota carcass base was down $2.05 to $45.55

USDA reported carcass cutout values this afternoon rose $1.06 to $61.23/cwt.

“The market feels that a trade deal with China has the potential to lower Chinese tariffs on U.S. pork products significantly,” Stewart-Peterson said. “This could, of course, spur large purchases of U.S. pork products to replace losses from African swine fever. The sow herd in China was down 15% in January from a year ago, and we are still seeing reports of the spreading disease.”

In addition to production possibly slowing down, pork prices may receive support. “Market seeing pork production up 5-7% above year ago record since early January but this could shift back to 2% over year ago levels soon,” the Hightower Report said. “Storms in the Midwest and more snow into the weekend could help support pork product prices soon.”

Cattle

Boxed beef cutout values this afternoon were higher on Choice and steady on Select on moderate to good demand and light to moderate offerings, the USDA said.

  • Choice was up $1.58 to $218.07/cwt.
  • Select was down 9 cents to $211.41.

In negotiated cash sales in Nebraska, there was no reportable trade, the USDA said.

“Cash trade so far this week has not been very active,” Stewart-Peterson said. “Bids in the country are only seen as high as 123 with no actual sales reported. Apr cattle are holding essentially a normal premium to the cash market for this time of year, so today's price action may be foreshadowing some weaker cash trade this week.”

The technical outlook suggested good things about the short-term trend in cattle markets. “The market's close above the 9-day moving average suggests the short-term trend remains positive,” the Hightower Report said.

These data and comments are provided for information purposes only and are not intended to be used for specific trading strategies. Although all information is believed to be reliable, we cannot guarantee its accuracy or completeness. Commodity trading involves risks, and you should fully understand those risks before trading.


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