AgriVisor Morning MarketWatch

Friday, February 02, 2018
***** Corn futures fractionally weaker at the break; soybeans down 5 1/2 to 6 1/4 cents; Chicago wheat off 3 3/4 to 4 1/2. *****

   # U.S. soybean prices face spillover pressure from a selloff for futures on China’s Dalian exchange.  Asian palm oil markets also finished the week lower as disappointing export data weighed on prices.  
   # March soybeans are bouncing around among a handful of key moving averages, the 20-day holding as support so far this morning.  The contract has nearly made a 50 percent retracement of the move up out of January’s low.  $9.67 1/4 rests down below as the 50 percent Fibonacci target.
   # Egypt is in the market for wheat today.  The top-importer will likely look to Russia to fill its needs.  Black Sea wheat remains cheap and enjoys a freight advantage relative to U.S. offers.
   # U.S. wheat export sales are picking up slowly and shipments are running strong.  USDA predicts all wheat exports to drop 8 percent from last year.  Strong corn exports have been a bright spot for the market this week.  Cumulative sales are still behind a year ago by 20 percent, but interest in U.S. corn is steadily growing.  The government analysts expect total corn exports to fall about 16 percent on the year.   
   # Farmers in the U.S. were seen making catchup old-crop sales this week, but they remain under sold versus a normal pace.  Estimates have 50-55 percent of Illinois 2017 crop marketed with soybeans about 70-75 percent sold.  Iowa farmers are thought to be lagging slightly behind on their marketing efforts.  
   # The Central Illinois producer corn basis average was marked at 21 cents under March futures yesterday, soybeans at 35 cents under.  USDA listed the corn and soybean basis averages for Interior Iowa at 37 and 74 cents, respectively.      
   # USDA reported December soybean crush at 5.29 million tons.  The total was up on the month and higher on the year.  
   # This month’s jobs report was a strong one.  Nonfarm payrolls jumped by 200,000 versus expectations of +177,000.  Wages were up to an average hourly rate of $26.74.   
***** Cattle futures may have trouble finding follow-through from buyers into the end of the week; hogs look to start steady/weaker. *****

   # Cattle futures rallied sharply on Thursday to follow up a key quarterly inventory report.  Market sentiment is positive with help from firm cash and wholesale prices.  
   # Technical buyers are supporting hogs and finding help from an uptrending cattle market.  Same as for cattle, though, the longer-term supply projections are expected to develop as a market headwind.