AgriVisor Morning MarketWatch

Friday, February 10, 2017
***** Corn futures up 1 1/2; soybeans higher by 4 to 8 1/4 cents; Chicago wheat down a penny. *****

   # Corn and soybean futures take on a mostly firmer tone overnight.  Wheat gives a fraction or two back after Thursday’s rally pulled futures into technically-overbought territory. 
   # Traders will likely take one more session to digest the latest WASDE report:
   # A string of record weekly ethanol production tallies led to USDA analysts raising the grind target by 25 million bushels.  Carryout was cut to 2.32 billion bushels and came in just slightly under the average trade guess.
   # No changes to the U.S. soybean table, no big surprise there.  A shock to many was there being no adjustment to Brazil’s output projection, left unchanged at 104 million tons after Conab earlier released an estimate of 105.6 mt.  A cut of 1.5 mt made to Argentina’s production estimate was fully anticipated.  
   # It was a friendly report for wheat as it featured a 50 million bushel bump for U.S. exports that was encouraged by production cuts for countries including India, Kazakhstan, and Ukraine.  World ending stocks dropped from 253.3 to 248.6 million tons.    
   # Funds were sellers on report day but remain net-long corn and soybeans.  The corn position is bullish by nearly 15,000 contracts, soybeans by 165,000 contracts.  Money managers pared their net-long wheat position down to around 75,000 contracts.  
   # March corn futures maintain support from their 200-day moving average while they have Thursday’s high and low of $3.72 3/4 and $3.67 1/2 to provide short-term technical guidance.  
   # Crude oil futures rally on comments from the International Energy Administration.  The group says it has observed very strict compliance on the part of OPEC in sticking to agreed production cuts.      

***** Cattle fundamentals turning less friendly as hogs face pressure from chart sellers. *****

   # Wholesale beef prices are leaning weaker and indicate flagging demand.  Domestic consumption will likely be soft until picking up seasonally with the temperature.  Exports are showing some signs of softening as well.              
   # Lean hog futures are running into technical selling after reaching into overbought territory earlier in the week.  On the fundamental side, packer margins are high enough to keep hog slaughter high; demand is keeping up thus far.