AgriVisor Afternoon MarketWatch

Thursday, February 01, 2018
***** Corn futures fractionally firmer on the day; soybeans drop a dime; Chicago wheat lower by a penny. *****

   # An interesting session for the grains, with futures testing the downside before staging a recovery off the lows.  Soybeans stayed weak after losing technical support from the March contract’s 100-day moving average. 
   # Argentina’s weather forecast turned just slightly less threatening.  Chances for rain exist briefly next week and again out on into the end of the 10-14 day outlook.  Still, another weekend’s worth of hot, dry conditions may likely bring back the bulls.  
   # Strong export sales helped to support the corn market.  New commitments totaling 1.85 million tons were well above pre-report predictions.  Traders are starting to see regular flash sales pop up on the daily reporting system.  
   # Fund traders were a small net buyer of corn on the day, further whittling from a hefty bearish bet on the grain.  The large speculators are still estimated net short by about 175,000 contracts.  They were back to selling soybeans and will start tomorrow with a net-short near 75,000 contracts.  
   # The Brazilian soybean harvest is pegged at about 5 percent complete.  Progress is likely to slow as the forecast turns wet throughout the central and northern stretches of the country.  Eyes are trained on the top-producing state of Mato Grosso, knowing that a slow start for the bean harvest has the potential to turn into late start for safrinha corn plantings.  
   # No major changes for the U.S. weather forecast.  The 6-10 day outlook is cold and dry for the Midwest while the 8-14 day is a touch warmer and considerably drier.  The U.S. Drought Monitor showed area tagged with D0-D4 drought designations growing from 62 to 67 percent last week.  
   # The stock market started lower but pared gains into the afternoon hours.  Investors were waiting to have a look at Apple’s earnings report.  This morning’s report schedule included mostly positive numbers on Jobless Claims, Construction Spending, and Manufacturing activity.  Tomorrow morning will feature the monthly unemployment report.      

***** Live cattle rally $2.30 to $3; feeders up as much as the $4.50 limit; hogs gain $0.57 to $1.60. *****

   # Cattle futures jumped higher after the quarterly inventory report showed the herd expanding at a slower rate than anticipated.  Beef export sales at 31,000 tons were solid this week to help support the day’s rally.     
   # Hog futures enjoyed spillover support from a higher cattle trade today.  Buying enthusiasm was stifled somewhat by weaker pork values.  The carcass cutout average was lower by $1.27 on the midday report.  Cash hogs were seen trading a little firmer with deals in the Western Corn Belt averaging $72.21.