AgriVisor Afternoon MarketWatch

Friday, February 03, 2017
***** Corn futures down 2 1/4 cents; soybeans drop 8 to 10; Chi wheat lower by 4 to 4 1/2. ***** 

   # Nearby corn futures gain 2 3/4 cents for the week; soybeans down 22 1/4 over five sessions; Chicago wheat up 9 3/4.
   # Soybean futures ran out of steam after a week of favorable weather in South America.  Export sales are tapering off at an accelerating rate and trade demand is shifting to Brazil in a big way.
   # Analysts at Safras estimated a Brazilian soybean crop north of 107 million tons.  The USDA will likely move to up its estimate on next week’s crop report after having bumped it up to 104 mt in January.
   # Corn futures benefitted from strong export and ethanol reports this week, but they could not build up enough momentum to propel the March contract past technical resistance at $3.70.  The $3.70-$3.75 price zone includes a recent high and two key retracement targets.  
   # Selling on the mid-week price strength may have brought U.S. farmers up to just more than 55 percent on their 2016 corn crop.  The flow of soybean sales has been halted and the farmer remains 75-80 percent sold.  
   # Some producers have been an aggressive marketer of new-crop soybeans because of their knowledge of an impending acres switch this season.  Analysts are projecting that soybean area could rise by more than 5 million acres from the 83.4 million planted in 2016.
   # The board may be starting to price in expectations of acres switching.  The new-crop bean/corn multiple dropped to 2.57 at the end of this week.  SX16/CZ16 was 2.27 this time last year.  
   # The January jobs report was a mixed bag as it featured a strong payroll gain but weak wage growth.  Stocks indexes rallied behind the financials that benefitted from talk of a Dodd-Frank Act repeal.  The dollar index was back and forth as traders digested comments from Fed officials.      

***** Live cattle futures finish fractionally firmer; feeders fractionally weaker; hogs flat to $0.67 higher. *****

   # Cash and wholesale markets were softer this week to help weigh on cattle futures.  The board held up reasonably well in response to bearish Cattle on Feed and Inventory reports.          
   # Bacon is the talk of the hog trade after the recent cold storage report showed smaller than expected inventories of the meat.  The belly cutout average was up $3.84 on the day to help offset weakness for loins and ribs.