AgriVisor Morning MarketWatch

Wednesday, January 11, 2017
***** Corn futures down 2 cents; soybeans off fractionally; Chi wheat lower by 4 ahead of the morning break. *****

   # Fresh news is limited for the grains ahead of Thursday’s reports.  Crop Production, quarterly Grain Stocks, WASDE, and Winter Wheat Seedings reports will be issued at 11:00am central tomorrow.    
   # Soybeans are not yet taking cue from higher soyoil futures.  U.S. soyoil finds support from higher prices for its rival substitute palm oil.  Asian palm oil prices rallied on data showing exports up strongly in the first 10 days of January.  
   # March corn futures are drifting lower toward support from an intersecting pair of 20- and 50-day moving averages.  A big move up on report day would first find resistance from $3.69.  $3.87 1/2 is a July high on the continuous chart that could get in the way, but there is little else to pushback against an upside breakout before $4.  Potential support on a move to the downside would come into play at $3.31 and $3.25 before nearby futures test $3.  
   # March soybean futures are also bouncing around in between some key moving averages as they look to find technical direction from a report-day moving.  $9.75 lends potential support as a measuring target after the break of the uptrend in December.  $10.74 and $9.38 are key highs and lows to watch.  
   # Soybean futures have improved over corn this week, but the soy/corn ratio has been on a downtrend since peaking on December 1st.  The current new-crop futures multiple is nearly 2.6 compared 2.3 at this time last year.  A further decline for the multiple would be expected if a large 2017 acres switch continues to be talked about.  
   # Forecasters at NOAA put a 5 out of 5 confidence rating on their outlook for warm weather over the next two weeks.  The red-shaded maps are also accompanied by maps covered in green to indicate high chances of above normal precipitation for the Midwest through the next 6-14 days. 
   # Financial markets are still back and forth over what to expect out of President-elect Trump’s nearing takeover of the White House.  The dollar continues to be a good barometer of trader sentiment, having mostly strengthened in recent weeks on ideas that better economic growth potential comes along with a new administration.  

***** New highs for cattle futures keep the technical picture positive; hogs supported technically but are losing some fundamental optimism. *****

   # The cattle market will find guidance from today’s action on the Fed Cattle exchange.  Better cash and wholesale prices have resulted in a change of trader sentiment reflected by a three-month run higher for futures, but beef values may now be approaching levels that start to find pushback from the consumer.     
   # 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.