AgriVisor Morning MarketWatch

Friday, February 03, 2017
***** Corn futures down a penny; soybeans steady to 2 cents higher; Chicago wheat down 3 to 4. *****

   # Corn futures take a step back after failing to breach January’s $3.71 high yesterday.  Fund traders are taking pause after closing shorts and opening new longs early in the week.    
   # Lower Asian palm oil prices help to weigh on the U.S. soy complex this morning.  Healthy rains throughout the top-producing countries Malaysia and Indonesia have paved the way for sharp rise in output this year.  
   # Export sales were fair.  New bookings for corn were 1.14 million tons.  Soybean sales were 624,000 tons for the 2016/17 marketing year and a strong 351,000 for 2017/18.  Wheat sales were more than anticipated at 450,000 tons.  
   # Some additional corn sales popped up on the daily reporting system, 110,000 tons to Japan and another 140,000 to an unknown buyer.
   # Soybean exports are soon to taper off now that the Brazilian harvest is underway.  Strong demand and high yields in the early going will allow Brazil to export nearly twice as many bushels in January and February than were handled last year. 
   # Shippers in the U.S. will devote more of their resources to handling corn now that the major bean push is out of the way.  Corn futures have shown strength over the previous two months as buyers work to draw corn out of the hands of a reluctant seller on the farm.
   # USDA’s Illinois Cash Grain Prices report lists average basis values for the central region at 17 cents under March future for corn, 30 1/2 under for soybeans.  The Interior Iowa basis levels for corn and soybeans are 38 and 82 cents under, respectively.  
   # Next week’s market will be driven by anticipation and eventual digestion of the February 9 crop report.  Analysts see potential for upward demand revisions, but nothing that alters carryouts significantly.  
   # The January jobs report featured a strong gain of 227,000 payrolls to beat a consensus estimate of +174,000.  The unemployment rate ticked up to 4.8 percent from 4.7 percent.  Labor-force participation remains low at 62.9 percent.       

***** Cattle futures face negativity from the fundamental and technical seller; hog futures pause after reaching into overbought territory on the charts.  ***** 

   # Live cattle futures will have a trade guided by technical influences at the end of the week.  Bears will point to the short-run moving averages turning lower after a break of the four-month uptrend.  Bulls call the recent weakness a correction and look to at least take advantage of a move up to fill the gap opened on Monday.        
   # Pork prices have showed resiliency against worries about high production and weakening demand, but they have lost the upside momentum that helped keep market sentiment rosy through the fall months.