AgriVisor Afternoon MarketWatch

Wednesday, March 01, 2017
***** Corn futures gain 7 1/2 to 9 cents; soybeans up 14 to 16 1/4; Chicago wheat finishes higher by 9 1/2 to 13 1/4. *****

   # Grains furthered a rally that was sparked by talk of changes to the Renewable Fuel Standards.  Ethanol demand and corn use potential are bolstered by a possible waiver that would allow 15 percent blends to be offered through the summer months.  A U.S.-only biodiesel production credit would likely prove friendly for domestic soy demand.
   # Fund traders are covering grains shorts and opening new longs.  The managed money corn long is now approaching 100,000 contracts.  Funds are net-long soybeans by more than 150,000 contracts.  They have nearly evened up after long holding a net-short wheat position.
   # Reuters reported on the Japanese reaching into their emergency corn holdings.  Inventories there are low as shipments from the U.S. are late to arrive due to bad weather crimping the flow of exports from Pacific Northwest ports.    
   # Japan remains the second largest buyer of U.S. corn for the 2016/17 season, behind Mexico.  The PNW delays are keeping unshipped sales to Japan high.  Worry about deteriorating trade relations with Mexico is warranted with nearly a third of outstanding sales due to ship to our southern neighbor.   
   # Tomorrow’s export sales report may help make or break the early-week rally.  New corn sales are expected near 800,000 tons with soybean export commitments maybe rising by 500,000, wheat 400,000.  
   # Dow 20,000 – make that Dow 21,000 after today’s record-setting stock market rally.  Markets are signaling that a March interest rate hike is more likely than not and investors are taking that as a sign that the economy is doing well.  

***** Live cattle futures down $0.35 to up $0.57; feeders drop $0.57 to $1.02; hogs up $0.17 to $0.82. *****

   # Cattle futures ended the day mixed but still have a strong bias about them.  Nearby live cattle futures are regenerating technical momentum and come close to testing one-year highs.  More gains for boxed beef after the outlook was turning very bearish a few weeks ago – choice average up $1.85 on the day, select up $1.52.    
   # Hog futures are working on a technical rebound while the fundamentals turn a touch negative.  The belly cutout average was down $2 on the day and strength for the bacon cut no longer sparks the same enthusiasm from buyers.