AgriVisor Morning MarketWatch

Friday, January 11, 2019
***** Corn futures up 2 to 2 1/4 cents at the break; soybeans up a nickel; Chicago wheat higher by 6 1/2 to 7 1/4. *****

   # Today was supposed to be crop report day. The government shutdown will delay the Crop Production, WASDE, Grain Stocks, and Winter Wheat Seedings reports. Analysts still submitted estimates for the reports. The average trade guesses for yields are 178 bushels per acre for corn (USDA November 178.9 bpa) and 51.8 bpa for soybeans (November 52.1 bpa).
   # Analysts at Goldman Sachs continue to suggest commodities to be a good investment for 2019, noting that slowing interest rate increases and a softer dollar will serve support to the space. The Goldman Sachs Commodity Index was down 15 percent in 2018 compared to the S&P 500 stock index that dropped about 4 percent. 
   # Investors will be more apt to buy commodities this year if a resolution to the U.S./China trade spat is achieved. Treasury Secretary Steven Mnuchin confirmed on Thursday that China’s top negotiator will be coming to the U.S. to resume talks later this month. It is seen as a positive sign that higher-level officials are being involved after the first round of face-to-face meetings wrapped up with noted success earlier this week.
   # Central Illinois is bracing for what could be up to eight inches of snow falling on Saturday. The storm is being called Winter Storm Gia now that winter storm warnings have reached more than 2 million people in coverage. The 6-10 day forecast shows an expected return to warmer temperatures for much of the Midwest. 
   # Rain is in the forecast for Brazil this weekend, except for some of the driest growing regions in the country’s Northeast. A drier recent trend for Brazil has farmers there worried that an early end to the rainy season could be ahead. Soybean crops have already seen top-end yield potential go away and conditions are not the most favorable for the approaching second crop corn planting season. 
   # Wheat is rebounding after taking a sharp tumble on Thursday. A flurry of tender activity earlier in the week was initially supportive, but the market sold off after it was learned that Russia was still able to offer massive amounts of wheat to top buyers like Egypt. Many traders still expect U.S. wheat demand to improve considerably once Russian supplies stop crowding out the global export market.  
   # March corn futures are back above their 100-day moving average but were turned away from their 50-day overnight and are now up against resistance from the daily pivot at $3.78 1/4. Thursday’s $3.76 1/4 - $3.82 3/4 range marks out key points of short-term support and resistance. 
   # Outside markets are mostly quiet to start the session. Stock futures are moderately lower after showing strength up to this point in the week. This week’s oil price rebound has been a tide to lift all ships with nearby WTI crude futures up about 9 percent since Monday. 

***** Livestock futures look to start mixed as traders await direction from cash and wholesale markets. *****

   # Cattle futures are consolidating near the top end of Tuesday’s big rally, waiting for fundamental guidance from this week’s cash trade. Boxed beef prices were slightly firmer on Thursday day to support the idea that cash values can hold steady with last week’s prints near $125.  
   # Higher cash hog prices are eroding packer margins slightly, but they remain generally strong enough to keep pork moving. The futures market is still focused on the possibility of better exports to follow from China’s African swine fever problem and Mexico’s stronger peso value.