AgriVisor Morning MarketWatch

Wednesday, January 25, 2017
*****Corn futures down a penny at the break; soybeans drop 4 cents; Chi wheat lower by 3 1/2. *****

   # Open interest in the corn futures market increased by 4,500 contracts on Tuesday to confirm the presence of fresh selling interest.  A portion of the new shorts may be assigned to hedgers whom were able to buy some grain from the farmer after corn’s recent rally.  Some selling is attributed to push back from the chart trader. 
   # March corn futures were resisted by their 200-day moving average on Tuesday and slip below their 10-day this morning.  The 20-day moving average is not far below to provide potential support, along with last week’s low at $3.58 1/2. 
   # The closely-watched analysts at Informa released an update to their 2017 acres estimates this week.  Corn area is expected to drop to 90.5 million acres from 94 million in 2016.  Soybean plantings are expected to rise by 5.2 million acres to 88.6.  
   # Traders will look to see if any export sales pop up again on the daily announcement system.  Yesterday’s report included over 250,000 tons of soybeans, some for old- and new-crop delivery, some for Mexico.  125,000 tons of corn were sold to an unknown buyer.
   # The export activity with Mexico is a promising development.  Market participants have some worry that relations with our southern neighbor could potentially deteriorate if the new U.S. executive administration shakes up trade agreements like NAFTA.   
   # Asian palm oil futures were back lower on Wednesday.  Inventories of the top edible oil remain somewhat slim but there is some worry over demand, particularly with there being an abundant supply of soy oil as a substitute.
   # Snowfall moved in from the Rockies to cover a stretch of northern Nebraska through Iowa.  Light precipitation is expected in the western Midwest today, but the eastern half is dry and likely stays that way for the next several days.  
   # Global equity markets trade broadly higher on Wednesday.  Traders are betting on an improving economic environment to come about after political anxieties fade.     

***** Cattle futures consolidate on recent highs; hogs face new technical pressure. ***** 

   # Cattle futures did not continue to charge higher this week but they have not yet suffered any sort of substantial break.  A cold, snowy West U.S. helps support the cattle market to a small extent this week.  Slipping demand is expected to stifle big upside in the near-term, though.      
   # Pork demand is holding up for now with packer margins backing down but still strong.  Hog futures are showing technical weakness as the April is vulnerable to breaking a three-month uptrend.