Agrivisor Afternoon Marketwatch

Wednesday, January 27, 2016
***** Corn futures ended mostly fractionally changed; soybeans higher; but Chicago wheat ended 7-8 lower. 

   # Talk about Russia and export policies got more confusing Wednesday.  Reports out of Europe suggested they were considering eliminating the remaining tariff on wheat exports.  That would boost sales, not slow them, further aggravating the upside price pressure in their domestic market. That counters the talk from early in the week suggesting they were considering moves to limit exports until new crop supplies become available.  They were still talking about new tariffs/duties for corn and barley.
   # Argentina remains in the focus too with traders at one of their primary grain exchanges talking about the damage to corn from dry weather in locations scattered across northern parts of their country.  This news only heightened concern for their crop after last week’s hot, dry weather pattern.
   # Soybean prices held firm despite China’s absence from the world market heading into the Lunar New Year holiday.  It starts on Feb 8.  They did buy some Brazilian cargoes earlier in the week.  Some think they have needs mostly covered into May. 
   # Brazilian soybean harvest is slow getting off the mark this year.  Mato Grosso is 3.7% done, about one-half the pace at this time last year.  Parana’s harvest is said to be lagging as well.  Early yield reports have been disappointing from Mato Grosso, but that’s expected given dry December.
   # The weekly ethanol grind was down this week, with output at 961,000 bpd.  Last week’s output was 983,000 bpd.  Ethanol stocks declined slightly last week.            
   # The Fed Reserve didn’t offer any surprises in their post meeting comments.  There was no indication of monetary policy direction.  They did indicate some concern for the sagging global growth rate, but again seemed to be relatively upbeat on the US economic prospects.
   # Equity markets sagged, while bond markets strengthened some with the Fed not ruling out a rate increase in March.  Crude oil prices firmed on persistent talk about possible output cuts.  The Dollar sagged from midday strength with the weakness in the equity markets. 

***** Live cattle ended $2.70 to $0.95 higher, feeders were $0.17 lower to $1.75 higher; with hogs $0.87 to $0.30 higher.  ***** 

   # Expectations for further near term gains in the cash market continues to fuel live cattle futures, along with short term technical attributes.  However, wholesale prices continue to erode, weakening packer margins.   
   # Cash hog prices continue to firm up, lifting lean hog futures with them.  But like beef, wholesale prices seem to be stalling.  And for both meats, retailer buyers may become more hesitant going into the Lenten season.