AgriVisor Afternoon MarketWatch

Monday, February 27, 2017
***** Corn futures drop 2 1/4 to 3 3/4 cents; soybeans off 2 to 2 1/2; Chi wheat down 7 to 12 1/2. ***** 

   # Grains dipped lower without any news to stir the bulls.  An active spread trade was featured as market participants adjusted positions ahead of First Notice Day for March futures.  
   # Grains faced some fresh technical selling.  Nearby corn futures skipped below their 50-day moving average but settled above the 100-day.  Momentum studies are turning negative.  Soybeans had a bearish outside day and head for a test of support from $10.  
   # Palm oil prices have been sinking as stockpiles in Asia recover and export demand struggles, but downside may be limited if talk of El Nino heats up.  Prices for the edible oil rallied to multi-year highs after an El Nino-caused drought slashed production in Malaysia two seasons ago.  
   # Brazilian producers had hoped to utilize northern ports along the Amazon River more heavily this season.  Shipments from the region were shaping up to be strong before heavy rains recent cut the flow of truck traffic to a halt.  More pressure may now be exerted on the already-stretched capacity of ports in the Southeast.  
   # Corn inspections were robust this week at 1.46 million tons versus 1.17 last week.  Soybean shipments were down on the week to 705,000 tons.  Wheat inspections were fair at 538,000 tons.  
   # A low pressure system is moving into the upper Midwest to trigger some showers and thunderstorms over the next few days.  Temperatures are expected to warm back up to above normal over the next 6-10 days.
   # Oil price strength faded on profit-taking during a lightly-traded session.  A look at the charts shows potential for a break-out after volatility has been compressed on a sideways move for futures.     
   # The dollar index rebounded after comments from a Fed official had traders betting on higher odds for a March interest rate hike.  Stocks inched higher on optimism over tax cuts and increased fiscal spending.    

***** Live cattle futures up $0.55 to $1.62; feeders rise by $2 to $2.17; hogs fractionally changed. *****

   # USDA analysts at the Ag Outlook Forum projected 2017 cattle prices dropping 7 percent to $109-$116 on beef production that is estimated to rise another 3 percent on the year.  Futures gained at the start of the new week on ideas that supplies will run relatively tight in the near-term, with higher wholesale prices confirming strong demand. 
   # Pork production is expected to rise 4.9 percent in 2017 to help beef/pork/poultry output rise to a record 100 billion pounds.  Prices are projected to fall by 6 percent to $42-$45.