AgriVisor Afternoon MarketWatch

Tuesday, February 27, 2018
***** Corn up 2 cents; soybeans up 1 1/2 to 3 3/4; Chicago wheat higher by 3 3/4 to 4 1/4. ***** 

   # Tomorrow is First Notice Day for March grain futures.  Traders expect so see a handful of corn deliveries, probably very few for soybeans.  Commercial buyers are mostly rolling shorts into the May while a fresh speculative long also flocks to the next month. 
   # Wheat was the session leader after various state-level Crop Progress reports showed winter wheat condition ratings having deteriorated further in February.  49 percent of the Kansas crop is tagged either Poor or Very poor.  Those two categories cover a whopping 78 percent of the Oklahoma crop.  Illinois wheat is rated 16 percent Poor/Very Poor and 45 percent Good/Excellent, the rest called Fair.  
   # Analysts are drifting further apart on their opinions for Brazil’s soybean crop size.  Some are near the USDA’s latest 112 million tons projection while others are reverting back to earlier-held beliefs that this year’s potential is greater than last year’s 114.1 mt crop.  Late planting and dry conditions in the South curb production potential but timely rains boost prospects in the central and northern regions of Brazil.
   # Australian meteorologists mention rising equatorial Pacific water temperatures as the primary signal that La Nina is on its way out.  Half of the climate models used by the Australian weather-watchers indicate a strong likelihood of La Nina being gone by the end of March.
   # Another daily corn sale was announced by USDA this morning.  130,000 tons of corn were sold to an unknown buyer.  Corn export activity is picking up as worry about South American crop prospects turns some business toward the U.S. market.  
   # The SX18/CZ18 futures multiple stands at 2.58 today, or just about even with where SX17/CZ17 was this time last year.  Analysts anticipate more corn-to-soy switching this spring, maybe enough to bring bean acres above corn.  USDA last week projected both corn and soybean area at 90 million acres apiece.  
   # Stocks turned lower and treasuries sold off as traders listed to new Fed Chair Powell talk about an improved U.S. economy.  Some investors are now pricing in as many as four central bank rate hikes in 2018.    

***** Live cattle up $0.15 to $0.62; feeders higher by $1 to $1.30; hogs steady to $.27 lower. ***** 

   # Live cattle futures started softer but managed to escape the session with small gains.  Higher boxed beef prices helped to encourage buyers on the day.  
   # The hog trade featured a bull spread trade that follows from market participants being friendly on near-term demand but worried about bulging production totals in the months ahead.