AgriVisor Morning MarketWatch

Friday, January 19, 2018
***** Corn futures up 1 to 1 3/4 cents at the break; soybeans up 3 to 3 3/4; Chicago wheat fractionally firmer. ***** 

   # A higher close for soybean futures today would make five in a row.  Soyoil prices are finding spillover pressure from a weaker Asian palm oil market and limit some of the early enthusiasm for the complex.  
   # March soybean futures have made a new high for the month as they approach a test of resistance from their 200-day moving average and also bump into the upper Bollinger Band.  A compression of volatility after the December price slide sets the board up for a possible breakout. $9.86 is a retracement target to watch.   
   # Export sales were mostly strong this week.  New corn sales of 1.89 million tons were double the expected total.  Soybean sales of 1.24 mt beat estimates ranging up to 1 mt.  Wheat sales were again disappointing at only 153,000 tons, or less than half of the anticipated mark. 
   # Cumulative corn export sales stand behind last year by 23 percent, soybeans down by 13 percent, wheat off 9 percent.  
   # Ethanol production was back up to a respectable total this week. Output was up 6.5 percent while stocks grew just marginally.  Corn usage was estimated at 107 million bushels.  U.S. processors are still firmly on track to meet the USDA’s record 5.525 billion bushel grind projection for the marketing year. 
   # The annual Farm Futures acreage survey found farmers intending to switch more acres over to soybeans.  Poll responses were used to estimate 2018 corn area at 90.1 million acres, with soybean plantings just a few acres more.  
   # Trade officials meet in Canada next week to discuss the fate of NAFTA.  Our neighbors are still balking at U.S. demands that include new import standards for auto production and a removal of Canadian dairy and poultry tariffs.  
   # The House passed a stopgap spending bill on Thursday, so it is left up to the Senate to approve or else the government shuts down at midnight tonight.  

***** Cattle look to start steady/weaker; hog futures vulnerable to a break lower from the recent uptrend.  *****

   # Cattle futures will look for guidance from a cash market that should develop more fully today.  The benchmark for previous trades is $119-$120.  Technical buyers work with renewed momentum, but will have to work against resistance from February’s 50-day moving average.               
   # Hogs have technical momentum that may be hard to sustain with supply-side fundamentals still leaning long-run bearish.  The board could keep support if further gains for wholesale markets help cash markets close the gap on futures.