AgriVisor Afternoon MarketWatch

Thursday, January 05, 2017
***** Corn futures up 1 1/2 to 2 cents; soybeans down 2 1/4 to 2 3/4; Chicago wheat rallies 5 to 7 3/4. *****
   # Last week was a big one for ethanol production, which was up about 1.5 percent on the week.  Corn and sorghum usage was nearly 110 million bushels.  Corn grind needs to average a touch under 100 million bushels to meet USDA’s target for the marketing year. 
   # Fund traders are squaring some positions ahead of report day.  Managed money is estimated net-short corn by around 90,000 contracts and net-long soybeans by 95,000.  Wheat prices have benefited from short-covering but the large-spec trader category still holds a bearish bet of more than 100,000 contracts. 
   # Market participants are uncertain who President-elect Trump will select to fill the Department of Agriculture secretary role.  There has been some consternation in the industry over recent nominee to head the EPA, Oklahoma Attorney General Scott Pruitt.  The ag community has mostly cheered the selection of Iowa Governor Terry Branstad as ambassador to China.  
   # Corn futures posted gains for a fifth straight session.  The March contract found buyers above $3.60 today, but $3.65 is the December high that provides more formidable technical interest.  $3.70 is the six-month high and a point that is expected to trigger some selling from the farmer. 
   # Export sales will be reported tomorrow morning, with delay due to Monday’s market holiday.  Traders expect to see new corn bookings down on the week to near 800,000 tons.  Soybeans should run near 1 million tons again.  Expectations remain low at around 350,000 tons even though the past few weeks have featured strong wheat numbers.  
   # Commodities were mixed despite higher oil trying to lend leadership and even though the dollar index was sharply lower.  Crude oil prices were supported by stocks having dropped by much more than anticipated last week.  The expected OPEC production cut helps underpin strength.  The dollar was weaker after minutes from the last Fed meeting outlined some uncertainty on the part of committee members about the trajectory of interest rates in 2017.    

***** Live cattle futures down $0.35 to $0.60; feeders fractionally mixed; hogs hold gains of $0.17 to $0.35.  ***** 

   # Bulls were winning out early in the session but buying interest faded and cattle futures ended lower. February live futures held support from their 20-day moving average and did not test yesterday’s low.  Boxed beef prices were a touch higher on the midday report but approach levels that may start to find some push back from the consumer.  
   # Hog futures finished firmer but off session highs. Pork production remains elevated with packer margins of up to $50/head, but the bears suggest there should be worry about domestic consumption and exports keeping up.