AgriVisor Afternoon Marketwatch

Tuesday, January 10, 2017
***** Corn futures ended 1-2 lower; soybeans 8-9 higher; Chi wheat fractionally changed. *****  

   The CONAB estimates for Brazil were the biggest news story of the day, and they weren’t much different than expected.  They raised their corn forecast 0.7 mmt to 84.5 mmt.  The increase was in the first crop and came with a bump in the yield estimate.  They raised the soybean estimate 1.4 mmt. to 103.8 mmt.  The last USDA number was a little under the new soybean estimate, but the USDA corn number has been higher.  They will release new estimates Thursday. 
   # There’s still an ongoing discussion about Argentine weather as the rain track stays north, sustaining the flood conditions.  And the southern areas remain parched with fires still occurring in pastures.  Some analysts are starting to take the soybean forecasts down even further with some estimates now in the low 50s.  But as the growing season is just beginning, that could be a little premature.  No mention has been made of corn, but there’s more of it to plant than soybeans. 
   Analysts are expecting  the U.S. 2016 corn crop will be revised a little smaller come Thursday.  The average trade guess is corn yield at 175.1 bushels per acres versus 175.3 in November.  The average soybean yield prediction is 52.7 final versus 52.5 in the last update.
   Even with the rough consensus of a higher soybean yield expectation, analysts can see soybean carryout coming down because they expect that harvest acres can drop slightly from the previous update.  Some have boosted demand numbers slightly too, but there was a more active debate after the low holiday shipping.
   The USDA did report a couple of corn sales today.  120,000 tons were sold to Taiwan.  241,600 tons were sold to unknown, split between the current and following crop years.  
   Weather remains a part of the mix, although has drifted to the background with the reports.  AS mentioned, the weather track in Arg. is the same.  Brazil continues to have mostly good weather except for the far northeast, where the drier pattern persists.  Weather is mostly good in Mato Grosso for both harvest and late growth. 
   # Economically, there wasn’t much occurring.  Analysts will likely note President Obama’s farewell speech tonight, and wait on next week’s inaugural address.   Mostly forex/financial/equity markets were choppy, directionless. 

***** Cattle futures ended $3.00-$2.17 higher; feeder cattle were $3.45-$4.50 higher, while hogs ended $1.30-$0.35 higher. ***** 

   Live markets are holding firm, but the wholesale prices are showing significant weakness.  Wholesale beef prices ended $2-$4 lower with the choice closing at $193.38.  Wholesale pork was lower as well, with the #2 cutout at $78.22.  
   The break in wholesale prices and firm live prices will pinch packer margins, likely leading to softer markets into week’s end.  The cash market also has to traverse another short slaughter week next week with the Monday holiday.