AgriVisor Afternoon MarketWatch

Monday, February 05, 2018
***** Corn futures down 3 cents; soybeans lose 7 1/4 to 9; Chicago wheat finishes lower by 6 1/2 to 7 1/4. ***** 

   # Talk of a Chinese investigation into alleged U.S. sorghum dumping helped weigh on the market early.  Word of the probe comes after the U.S. recently placed fresh tariffs on imports from China.  Sorghum into China has been a strong market for U.S. growers in recent years as end users in China use it as a partial substitute for more expensive domestic corn stocks.   
   # USDA announced flash sales for 130,000 tons of corn to South Korea and 198,600 tons of soybeans to an unknown buyer.  The soybean sale included 66,600 tons committed for delivery in 2018/19.  All export deals of more than 100,000 tons are reported by the government on the daily sales system. 
   # Corn and soybean export shipments were both up on the week.  Cumulative corn inspections are down by a third on last year’s record pace.  Soybean inspections are off 14 percent on the year.  Wheat shipments were shy of the pace needed to meets USDA’s estimate this week, but most traders expect U.S. exporters to meet the government’s 975 million bushel projection.   
   # Canada wheat stocks came in a touch lighter than expected at 23.56 million tons.  Canola inventories at 14.12 mt were under the average trade guess of 14.30 mt.  Also a little friendlier than expected were estimates for barley and oats stocks. 
   # The verdict is still out on how much snow will be falling over the Midwest this week.  A storm was moving through Iowa this morning and was slated to reach Illinois by late afternoon.  The latest forecasts had Illinois snowfall totals lowered to 1-3 inches.  Chances for snow stay in the outlook through the end of next weekend.  Temperatures are not likely to breach much above 35 degrees F.  
   # South American production numbers will be the key feature of this week’s crop report.  Analysts predict the Brazilian corn crop near 93.5 million tons versus 98.5 mt last year, soybean production at 111.4 versus 114.1 mt.  The average trade guesses for Argentina are 40.5 mt corn and 53.8 mt soybeans versus a respective 41 and 57.8 mt in 2017. 
   # The Brazilian real currency has fallen weaker against the dollar over the past two weeks, after having strengthened considerably in early January.  Action for the dollar/real exchange rate will have an increasingly key bearing on trade flows as Brazil starts to fill the export pipeline with fresh harvested soybeans.      
   # Stocks sold off further as sellers chased the idea of a needed correction.  A perceived hawkish shift in stance by the Federal Reserve Bank and a string of disappointing corporate earnings reports triggered the start of the slide late last week.  

***** Live cattle futures drop $0.72 to $1.15; feeders off $1.25 to $1.45; hogs $1.02 lower to $0.62 higher. ***** 

   # Cattle futures were steady to start the morning before sinking under selling pressure into close. General defensiveness displayed by major markets crept into the livestock trade.  Boxed beef was higher on a quiet morning for that market.      
   # Firm cash and wholesale markets support the front of the futures curve but sellers are pressing on the deferred months with the expectation that production levels accelerate substantially in the coming several weeks.