AgriVisor Afternoon MarketWatch

Tuesday, December 26, 2017
***** Corn futures up a penny on the day; soybeans rally a dime; Chicago wheat drops 2 cents. ****​*

   # Soybeans start with the benefit of support from higher Asian palm oil prices and from a rally for bean futures on China’s Dalian exchange.  Keeping a lid on upside is a favorable shift for Argentine weather.  
   # Rain has returned in Argentina, falling relatively heavier over the weekend north of the Buenos Aires capital city.  The forecast stays mostly dry until late next weekend.  Conditions are much improved for Brazil’s major growing regions with more moisture slated to fall throughout the week. 
   # Friday’s Commitments of Traders report showed funds back to being big sellers of corn, having built the net-short position back to about 222,000 contracts.  They have turned net-bearish on soybeans by more than 40,000 contracts.
   # A corn sale ticked across the USDA’s daily export reporting system.  134,148 tons of corn has been promised to Mexico.  China stepped into buy some sorghum last week, but a corn sale hadn’t shown up on the flash sale system since December 15th.  
   # Weekly grain export inspections came in light relative to expectations.  Corn shipments were about even with last week at 609,000 tons but fell short of even the lowest trade estimate.  Soybean inspections were 1.3 million tons versus 1.8 mt last week.  Wheat sales were fair at 494,000 tons.  
   # Brazil’s real currency was trade moderately higher on the day to help lend additional support to U.S. soybean prices.  The real and Argentina’s peso have been displaying general weakness against the greenback lately and terms of trade have thus favored the South American export programs as a result.  
   # Deep cold is in the forecast for the Midwest through the next two weeks.  The outlook is also dry, so wheat growers in the Plains may have some worry regarding winterkill potential.  Snow coverage is wide in Nebraska but lacking in parts of southern Kansas and Oklahoma.       

***** Cattle futures rally sharply to follow up Friday’s bearish Cattle on Feed report; February hogs trading higher by more than $1.50/cwt. *****

   # Traders were again surprised by high Cattle on Feed estimates.  The Friday report found all-on-feed at 108.1 percent of last year with placements at 113.9 percent versus 106 percent expected.  The bearish COF numbers were offset by cold weather considerations on Tuesday.         
   # Friday’s Hogs and Pigs report found the headcount at 102 percent of a year ago, in line with pre-report expectations.  February hogs are working up out of a potential double bottom with a test of resistance coming up from the November $72.25 high.