|Hogs: Afternoon Comments (Friday, January 20, 2017 20:32:55)
February through August lean hog futures ended the day 12 1/2 to 82 1/2 cents lower, with far-deferreds firmer amid spreading. For the week, February hogs remained within the recent consolidation range and ended 47 1/2 cents below last week's closing level. February hogs ended the week at around a $1 discount to the cash index. If packers remain willing to offer steady to higher bids early next week, it should give nearby futures a boost. But traders are also concerned about the pork market, as movement slowed this week, which could translate into softer packer demand in the near-term. Pork production has started the year 8.4% behind year-ago and weight data suggests marketings are current. The lighter-than-expected start to hog marketings in 2017 has largely been behind recent cash market strength. But based on Hogs & Pigs Report data, this marketings hole should be temporary.
|Soybeans: Afternoon Comments (Friday, January 20, 2017 20:34:45)
Soybean futures ended the day marginally to 2 3/4 cents lower today on profit-taking but avoided doing any technical chart damage. March soybeans posted a weekly gain of 21 1/2 cents and November soybeans gained 10 3/4 cents. Late-week profit-taking signals the potential for more of the same heading into next week, but a lot will depend on traders' focus. This week's gains were due to flooding in Argentina, but weather in Brazil is mostly favorable and new-crop supplies are moving into exportable position. Spreading with corn could also be a focal point in the market next week. While a daily dose of export news has been absent, as expected this time of year, weekly export sales topping 1 MMT for 2016-17 signal importers are still interested in securing high-quality U.S. supplies. But once the export window closes, it will be more difficult for soybean futures to see sustained periods of price strength.
|Corn: Afternoon Comments (Friday, January 20, 2017 20:34:11)
Corn futures posted gains of 2 1/4 to 3 1/2 cents through the December contract, which was on the daily and weekly highs. For the week, March corn futures pushed above last fall's high and ended 11 1/4 cents higher. Bulls carry momentum into next week after the breakout above the October highs. That could encourage traders to cover more short positions and potentially add long positions. Without supportive news, however, followthrough buying may be limited. We maintain our stance that price strength should be sold, so use the rally to get current with advised sales and be prepared to make additional old- and new-crop sales. After a lull through the holidays, corn export demand perked up the week ended Jan. 12. The next month will be a key period for corn export demand, as exporters will likely begin to see soybean shipments slow as importers turn their focus to South America. That will free up some additional loading space for corn at ports. Still, U.S. corn faces a lot of competition from hefty feedgrain supply domestically and abroad.
|Wheat: Afternoon Comments (Friday, January 20, 2017 20:35:23)
Winter wheat futures saw a boost from the corn market today, with SRW up 2 1/4 to 4 3/4 cents and HRW steady to 3/4 cent higher. Spring wheat ended the day mostly around 2 to 3 cents lower, with the front-month down 8 cents. For the week, March SRW ended with gains of 2 1/4 cent, March HRW posted a week loss of 5 1/4 cent and March HRS ended with a weekly loss of 14 1/2 cents. Traders' concerns over dryness across the Central and Southern Plains has been alleviated, for now, but crop watchers say more timely precip will be needed through winter. If corn futures continue higher next week, it should at least limit pressure in the wheat markets, but we also think if the dollar continues to retreat, it would be supportive for both markets. Lofty supplies of global feedgrains limit the wheat market's ability to rally through the winter. As a result, be prepared to increase 2016- and 2017-crop marketings on price strength. In the meantime, the U.S. should continue to gain demand for high-quality wheat given larger-than-normal supplies of feed-quality wheat on the globe.
|Cotton: Afternoon Comments (Friday, January 20, 2017 20:36:06)
Cotton futures rose 6 to 44 points today, with the July contract leading gains. March futures rose about 77 points on the week. Cotton futures have recovered from the larger-than-expected crop reported by USDA last week. The market will likely take its cues from the U.S. dollar and crude oil prices again next week. The market has absorbed the larger U.S. and global stocks projections from USDA and has turned its attention back to exports. While China is working to draw down its massive cotton reserves, the boost announced in that nation's GDP for 2016 revives ideas of rising export interest from that nation going forward. The market will eventually turn its attention to 2017 planting intentions. With soybeans offering some profit opportunity, planting intentions in the Delta and South may trend toward soybeans over cotton. But intentions could loom strong in the key Texas market where soybeans are not an option. A solid underpinning of demand should keep prices relatively steady going forward.