|Hogs: Afternoon Comments (Friday, December 02, 2016 21:06:14)
December lean hog futures closed 52 1/2 cents higher but deferred contracts closed 5 to 32 1/2 cents lower. The December contract lost about 30 cents on the week while the February contract declined nearly $2.75. Hog futures are vulnerable to more weakness as temporary tightness of market-ready supplies in some locations is expected to be relieved next week. However, packers are highly motivated to keep operations rolling at full capacity as they are working with handsome profit margins. This motivation may temper the setback in prices. Slaughter supplies are expected to rise through the month, possibly peaking ahead of year-end. Prices will likely slip on the boost in numbers. Meanwhile, holiday ham buying by retailers is ending, which will reduce wholesale demand. Seasonal tendencies suggest prices will decline heading into the holiday seasonal. With numbers expected to rise and wholesale movement weakening, that seasonal trend is likely to unfold again this year.
|Soybeans: Afternoon Comments (Friday, December 02, 2016 21:08:08)
Soybean futures closed mixed, ranging from 2 1/4 cents lower in the January contract to 1 1/2 cents higher in the November 2017 contract. January futures lost about 18 1/2 cents on the week. Traders will take a cautious approach to start next week as they assess the impact of the strong dollar on export demand. USDA's inspections update will give an early read as well any export sales announcements or lack of announcements from USDA. Traders will turn their attention to USDA's Supply & Demand Report due Friday. Early expectations call for a reduction in projected carryover supplies. Traders are turning their attention to South America as planting finishes up and the growing season moves into full swing. Trading volume will decline as the holidays near, which could result in some exaggerated price moves.
|Corn: Afternoon Comments (Friday, December 02, 2016 21:07:29)
Corn futures closed mostly 4 to 5 3/4 cents higher today amid corrective buying. Despite today's gains, March corn futures ended 11 cents lower for the week. Barring fresh, supportive news the upside will be limited to corrective buying in the corn market next week. But traders may be willing to cover short positions as they prepare for USDA's Supply & Demand Report next Friday. With no corn crop update this month, attention will be on the demand side of the balance sheet. We expect USDA to up corn use (ethanol grind) by 50 million bu. and lower carryover by a like amount from last month. South American weather will be closely monitored through winter, especially after last year's late-season struggles in Brazil and Argentina. Brazil's safrinha corn crop will likely be planted early as soybean harvest is expected to run two to four weeks ahead of normal. But La Nina conditions could lead to an earlier end to the rainy season and drier-than-normal conditions.
|Wheat: Afternoon Comments (Friday, December 02, 2016 21:08:46)
Winter wheat futures enjoyed a corrective bounce to wrap up the week. SRW wheat ended 6 1/4 to 16 cents higher for the day. HRW wheat finished around 6 cents higher. And HRS wheat ended narrowly mixed. Winter wheat markets posted sharp losses for the week, while spring wheat futures posted solid gains. With the winter wheat crop heading into dormancy with solid condition ratings, crop concerns are minimal. Traders will be more focused on USDA's Supply & Demand update on Friday, which will likely remind of hefty supplies of feed wheat. The plentiful feed wheat supply situation is likely to remain a limiting factor for the market, but the low prices should spur more demand. Global wheat use is expected to climb nearly 25 MMT in 2016-17, with the U.S. expected to see a dramatic increase in use. However, it typically takes multiple years to completely "cure" periods of excess supplies.
|Cotton: Afternoon Comments (Friday, December 02, 2016 21:09:45)
Cotton futures saw another choppy day of trade, but in the end futures were able to edge out modest gains of 14 to 25 points for the day. This was a midrange close. For the week, futures posted slight losses. This week's crop progress and condition update from USDA and Texas was the last of 2016. Therefore, there will be no official update on cotton harvest that as of Nov. 27 was just 77% complete nationally and 62% done in Texas. Therefore, traders will be left to monitor anecdotal reports and the weather for the remainder of harvest. More heavy rain is in the forecast for central Texas to Georgia and the Carolinas. Pakistan has suspended cotton imports from India, its main supplier of the commodity, presenting opportunities for other cotton exporters like the U.S. or Brazil to step in. In addition, cotton export commitments are running 50% ahead of year-ago for 2016-17, whereas USDA is calling for a 31.1% in cotton exports this season. This signals there could be some room to the upside on USDA's export forecast.