AgriVisor Afternoon MarketWatch

Monday, January 29, 2018
***** Corn futures up 1 1/2 to 2 1/4 cents; soybeans up 4 1/2 to 6; Chicago wheat rallies 8 to 8 1/4. *****

   # Grains were higher from the start and stayed that way, though soybeans did back off from session highs.  Dry South American weather remains the key driver.  Action in outside markets looks to be providing some extra guidance for the grains.  
   # USDA announced a daily sale for 115,000 tons of corn purchased by Egypt.  Traders will expect corn sales to pick up in usual seasonal fashion while also having some help from a weaker dollar.  
   # Export inspections were all around solid this week.  Corn shipments were up on the week to 39 million bushels but still fall short of the 43 mbu per week now needed to meet USDA’s marketing year target.  Soybean inspections totaled 41 mbu with the wheat tally at 21 mbu.
   # The ag analysts at Brazil’s IMEA organization estimated Mato Grosso’s soybean harvest at 12.4 percent at the end of last week.  The pace is near average for the region.  Wet weather this week is expected to slow things down, including the planting of the country’s second corn crop.  
   # A wetter forecast for northern and central Brazil contrasts with a dry one for southern Brazil and most of Argentina.  Analysts are making cuts to the Argentine production forecasts almost daily.
   # Moves to $10 on the SH18 are being met with interest by the sellers.  $10.02 is the intraday high from last week to contend with before the six-month top at $10.27 comes into play.  
   # Observers from the ag industry are turning slightly more optimistic that a U.S. withdraw from NAFTA would be averted.  The latest round of talks with trade officials from Canada and Mexico was said to have ended with progress toward the goal of re-negotiated trade terms.  
   # U.S. equities took a small step back in response to a reversal for the dollar and bond prices.  Investors are working to decode last week’s comments from President Trump and his administration on the direction of the dollar.  This week’s central bank meeting and unemployment report will help give further guidance to outside markets.   
   # The odds of an interest rate hike coming out of this week’s Federal Open Market Committee meeting are pegged at less than 5 percent. Analysts are expecting the fed funds rate to increase following the Fed’s March meeting. The current consensus calls for three rate increases in 2018.

***** Live cattle futures up $0.10 to $1.10; feeders fractionally changed; hogs $0.37 weaker to $0.12 higher. *****

   # The Cattle on Feed Fade worked out again today.  In alignment with recent trend, cattle futures held firm in the face of Friday’s bearish government report.  Better boxed beef prices helped out, with choice and select cuts higher on the midday update by $1.28 and $1.95, respectively.         
   # Spreading was featured for the hog futures trade today.  Firm cash and wholesale markets keep the front of the curve supported while expectations for accelerating production totals keep the deferred months defensive.