AgriVisor Morning MarketWatch

Wednesday, January 18, 2017
***** Corn futures down a penny at the break; soybeans off 4 to 6 cents; Chicago wheat steady. ****​*

   # Soybean futures reached to new six-month high on Tuesday but the March contract settled above its upper Bollinger Bands to indicate a short-run overbought condition.  $10.52 is a low to provide potential support.  
   # Truckers are on strike in Brazil this week to protest what they say are unfair wages being paid for their transportation of grain in Mato Grosso.  The row crop harvest is starting to ramp up in Brazil and traders will watch to see if protests are sparked in other parts of the country this season.
   # Soybean harvest in Mato Grosso is actually a touch ahead of the normal pace this year.  Early planting has allowed growers in the state to have cut 6-7 percent of soybeans, or about double that of last year.  
   # The dollar may be strong against major currencies like the euro and yen, but it has been losing ground on the Brazilian real.  An unfavorable exchange rate has pressured local soybean prices in Brazil and causes the producer there to be a slow seller.  A slow trickle of soybeans into the trade market is partly to blame for a slower than expected start to the export season in Brazil.  
   # Like in Brazil, farmers enjoy bumper soybean crop potential in Paraguay and Uruguay.  The latter two countries are South America’s third and fourth largest soy exporters, behind Brazil and Argentina.  
   # The forecast favors a drying out of Argentina over the next several days.  Heavy weekend rains added to wet weather woes for soybean growers there.  The Rosario Grains Exchange estimated that 30 percent of the crop is threatened by too much moisture.  
   # Fund traders have used the Argentina weather storyline as reason to turn more friendly the grains.  Managed money is estimated to have pared its net-corn short down to less than 75,000 contracts while length has been added to a soybean net-long that exceeds 125,000 contracts.  
   # A rebound for the dollar index pressures commodities this morning.  Some worry about the economic implications of Brexit are helping to weigh on the euro and pound.  

***** Cattle futures resume an uptrend on optimism over cash and wholesale performance; hogs show price action that suggests the move up may be exhausted for now. *****

   # Cattle futures moved higher on Tuesday to close the gap on last week’s gains in the cash market.  A pause in the decline for wholesale beef prices helps to put the bulls back in the driver’s seat.    
   # Falling pork packer margins validate some of the worry over demand at the start of the year.  Domestic demand may become a bit sluggish before a seasonally-late Easter rolls around.  Exports are still a source of concern because of their dependency on Mexico.