Agrivisor Afternoon Marketwatch

Tuesday, January 26, 2016
***** Corn futures ended mostly fractionally changed; soybeans 3-4 lower; but Chicago wheat ended 3 higher. 

   # Talk about a possible Russian wheat tariff, or suspension of exports until new crop arrives, is the key positive guiding wheat prices higher.  The world trade has also become a little unsettled with Egypt’s demand that any wheat sold to them be free of the Ergot fungus.
   # Weather is a part of the wheat mix too, with a story out of Europe yesterday indicating the early month cold wave may have caused more winter kill across parts of Eastern Europe than previously believed. 
   # Canada’s farm ministry indicates they think planting of spring wheat could drop 2% this year, potentially a 5 yr. low.  They also thought canola plantings could rise 4% because of better returns at the farm gate.
   # There was some talk in the corn trade today about the less than perfect weather in parts of Argentina, with some localized spots said to be looking at yields being cut in half by weather from earlier in the season, but also by last week’s hot, dry conditions. 
   # DuPont(Pioneer) thinks U.S. corn plantings could rise, soybeans decline slightly based on their order book.  They also indicated the 2nd crop corn area in Brazil could rise slightly.            
   # Argentina is said to still be offering corn below US Gulf for Feb/Mar/Apr, but that may diminish if production fears gain more attention.  So far, Ukraine is said to be matching the offers, but they shouldn’t have that much more to sell. 
   # In the energy markets, it is rumored the Russians and OPEC are talking about various ways to reign in the production of crude oil to help stabilize the market. 
   # Equity markets rallied on the heels of the stronger energy sector.  Quarterly earnings reports helped fuel some of the strength too.  There is some talk in the bond markets about the narrowing yield spread, and the indication it implies investors are concerned about flagging growth potential.
  #  The Dollar was generally stronger against its main rivals, but lost ground against commodity currencies, pulling the overall value down.  The stronger crude market generally drove the commodity currencies higher. The Fed is not expected to make a policy change at the end of its meeting tomorrow. 

***** Live cattle ended $1.60 to $0.37 higher, feeders were $0.87 to $1.47 higher; with hogs $0.82 to $0.15 higher.  ***** 

   # Firm cash cattle prices are giving futures a lift this week.  Wholesale prices are mixed to mostly lower, but packer margins remain good.  Industry attitude continues to the more optimistic turn that started the middle of last week.   
   # Steady strength in the wholesale pork sector is keeping packer margins high, and packer demand for hogs strong.  Hog numbers are seasonally tightening, but the pace will remain modest until winter has passed.