AgriVisor Morning MarketWatch

Thursday, January 05, 2017
***** Corn futures fractionally lower at the break; soybeans down 4 to 5 1/4 cents; Chicago wheat down fractionally. ***** 

   # Open interest fell on yesterday’s grain rally, corn down 2,700 contracts soybeans down 2,900.  Light volume and declining open interest indicate some short-covering that’s occurring without much new fresh bets being placed.
   # Some position squaring may not come as a huge surprise as it comes ahead of next week’s big crop report day.  USDA will issue final 2016 production estimates, update the supply and demand balance sheets, tally up grain stocks for the quarter, and estimate winter wheat seedings.  The reports will be released on January 12 at 11:00am central.   
   # Dry winter weather has triggered a drop for wheat crop condition ratings in the Southern Plains.  Wheat in Oklahoma was rated 25 percent Good, no excellent, compared with 77 percent Good or Excellent in December 2015.  Kansas wheat rated 44 percent G/E versus 54 percent last year.  Soft red wheat in Illinois rated 69 percent G/E versus 58 percent last year.  
   # USDA’s monthly Grain Crushings report found corn consumed for fuel alcohol production in November totaled 452 million bushels, down slightly on the previous month, but up from 434 million last year.  
   # USDA reported 171 million bushels of soybeans crushed in November versus 176 million in October and 166 million bushels last year.  
   # Nebraska should benefit from some light snowfall this week to help protect wheat from subzero temperature lows.  Some snow may accumulate in the Upper Midwest by the end of the week, but most of the Midwest will have their precipitation in the form of rain after temps moderate by Tuesday.  
   # Soybeans find some support from wet weather that has caused heavy flooding in Argentina’s Cordoba province.  Continuing rains will hamper efforts to finish corn and soybean planting across several area of the country.  Corn and soybeans are estimated at about 75 and 85 percent planted, respectively.  
   # The dollar index is taking another step back this morning as traders continue to digest yesterday afternoon’s release of minutes from the last Fed meeting.      

***** Cattle futures look to feature another active spread trade; nearby hogs bounce around between their 10- and 20-day moving averages.  ***** 

   # Cattle futures face pressure from technical sellers, but the nearby fundamental outlook remains somewhat positive due to sustained recent strength in cash and wholesale markets.  
   # Hog futures are consolidating on recent highs but lack the same upside momentum of just a few weeks ago.  The cash market is holding up on packer margins that remain strong.