Agrivisor Evening Marketwatch

Friday, January 29, 2016
***** Corn futures ended mostly 6 higher; soybeans 13-14 higher; and Chicago wheat 6-7 higher. *****

   # The stage was set early in the day for minor grain strength with crude oil and commodity indices showing some strength.  Export sales numbers were mixed, but it was the midday weather forecast for Argentina that carried prices higher into the close.
   # Midday weather forecasts for Argentina suggest the weather will start to turn warmer, drier for an extended period after the middle of next week.  That follows a week of hot, dry weather a week ago.  Moisture accumulations for January have been less than normal after a generally wet December.  Given the physical proximity, the weather for Argentina can affect Paraguay, Uruguay, and parts of southern Brazil too.  And for all of those areas, February represents the end of their growing season, making events critical to both corn and soybeans.
   # There was news out of Russia indicating the government has no plans to change the current export policy.  While that won’t help our wheat exports, at least it won’t lower the world price structure, adding to the downward drag on prices. 
   # - The European Commission cut its forecast for EU SRW stocks at the end of 2015/16 to 15.8 mmt from 17.6.  Generally, increased demand offset an upward revision to the 2015 crop.  Still, the 15.8 mmt. stocks would be 4.8 higher than last year. A portion of the increased demand is coming from wheat being used more readily as a feed instead of corn.
   # Weekly export sales were good for corn, 852,400 tons.  They were still weak for wheat, 347,000 tons.  Soybean sales, 647,800 tons were mid-range expectations, but offered little positive.  In the mix China bought some soybeans, but also had a small cancelation.
   # There was a wire story about India’s wheat situation.  Last year’s crop was off 7 mmt., cutting into stocks.  And this year’s crop has gotten off to a rocky start, with plantings down 7% and moisture coming in less than normal.  They could be left with a 10 mmt shortfall this year.
   # The Bank of Japan surprised the trade with a move to negative interest rates today.  That triggered a 2% surge in the Dollar/Yen relationship.  The move was taken to keep their economy from dropping into a recession.  Crude oil closed higher for the 4th straight day, with the spot contract now $5 over its lowest close. And stocks rebounded sharply with the persistent gains in crude.  Tech stocks were the biggest gainers.  The 4th qtr. GDP number, +0.7%, was down significantly from the 2nd and 3rd qtrs., but was in line with expectations.

***** Live cattle ended $0.12 to $1.12 lower, feeders were $2.17 to $2.35 lower; with hogs $0.50 to $1.00 higher.  ***** 

   # Cash cattle prices ended the week a little softer than they were last week.  Packer demand is not strong at the moment.  Wholesale beef prices were mixed, but seem to have a soft tone.
   # After the trade, the USDA released the cattle inventory report. The Jan. 1 herd was 3% higher than last year.  Beef cow numbers were slightly higher than expected.  But feeder inventories look like they were significantly higher than last year.   
   # Cash hog prices held firm, but packers seem less inclined to pay higher money than a week ago.  Wholesale pork prices were steady, and appear to be stalling in their upward drive.