AgriVisor Morning MarketWatch

Monday, February 12, 2018
***** Corn futures up 3 cents at the break; soybeans up 9 1/4 to 13 3/4; Chicago wheat up 5 1/4 to 6 1/4. *****

   # Firmer grains all around to start the new week.  Commodities in general are displaying a rebound along with global equity markets.  Trading volumes are robust.  
   # Grain bulls are mostly shrugging off weekend rainfall in Argentina, instead choosing to focus on a dry two-week forecast for the country.  Weather conditions are such that further deterioration in crop health is expected.
   # The U.S. forecast has turned wetter over the two-week outlook period.  Sunday’s run of the NOAA’s model shows a strong chance that drought-stricken areas of the Southern Plains will enjoy some relief starting on Monday or Tuesday of next week.      
   # Today should be the coldest day of the week in the Midwest.  Showers are possible both into the middle of this week and early into next week.  Both the 6-10 and 8-14 day forecasts lean cooler in the West, warmer in the East.
   # Friday’s weekly Commitments of Traders reports showed more short-covering by the hedge funds.  The managed money corn short was cut by almost 50,000 contracts to end the last reporting week at -83,000 contracts.  The net soybean short was estimated at just 10,000 contracts.   
   # Egypt purchased wheat from Romania last week on a tender that also included a deal with Russian shippers.  Russia is still working through an abundance of cheap wheat and as a result has lately been exporting roughly double what the U.S. has on a weekly basis.  Russia is projected to export 36 million tons in 2017/18 versus the U.S. at 26 mt.  
   # March soybean futures gapped higher to make a run toward resistance at $10.00.  The open gap makes today’s low at $9.94 worthy of watching.  A recent high at $10.04 3/4 stands above the market with the next key high being a six-month best of $10.27.  This morning’s move helps to keep momentum from faltering further after the board lost steam at the end of last week. 
   # Traders continue to keep an eye on China for fear that trade relations are deteriorating further.  Last week’s news that China had launched an investigation into alleged U.S. sorghum dumping was followed up with word that China was cancelling U.S. corn import contracts because of GMO certification troubles.  U.S. shippers are also still working out a solution an earlier development of China placing additional restrictions on foreign material standards for soybean imports.  
   # Stock index futures are rallying this morning as investor jitters show to be calming for now.  There remains worry from stock bulls over the central bank’s expected shift toward a more aggressive interest rate policy.       

***** Cattle futures look to open steady/firmer with help from rebounding outside markets; hogs vulnerable to follow-through selling at the start.  *****

   # Cattle futures have turned somewhat defensive as market-ready animals become heavier and more abundant.  February live futures at $126.52 now hold a premium to the $125 that was most actively paid in the cash trade last week.  Early guidance will be given by the boxed beef market this week.         
   # A turn lower for the pork market has weighed on hog futures.  February hogs are correcting lower from fresh contract highs established early this month and start this week with a test of support from their 20-day moving average.