The futuresone.com Weekly Ag Market Breakdown By David M. Fiala Thursday, January 26th, 2017

Transcription

1 The futuresone.com Weekly Ag Market Breakdown By David M. Fiala Thursday, January 26th, 2017 CORN Mar 17 Support: 356 Resistance: 376 Dec 17 Support: 386 Resistance: 401 Corn trade made new highs on Tuesday but then gave us a classic turn-a-round Tuesday and we were a dime off the high by Tuesday night. The weekly net change is 3 1/2 cents lower going into Thursday. March moved to the highest level since mid-july with the move to $3.71 and we did find support on the dime break. The weekly export inspections were neutral at 963,897 tons. The weekly export sales number was supportive at million tons. The daily wire has been active for corn this week. Dry areas in Argentina got a surprise rain over the weekend but heat returned keeping weather premium in the market. Ethanol stocks were up 2.90% on the weekly EIA estimates with production down.28% with gasoline demand estimated.37% lower. Poor ethanol margins remain our largest bearish concern for corn, but near term production has remained strong. Production could dip week by week until margins turn. Spring driving season is just around the corn, and the firm January meal values should help support ddg values. So we are optimistic margins will bottom soon. On the March chart support is at the $ day, then the $ day, then the $ day moving average. Resistance is at the $ day moving average; then the $ % retracement of the June to late August sell off. Hedgers call to discuss your individual situation and marketing plan for 2017.

2 SOY COMPLEX Mar Support: 1034 Resistance: 1088 Mar Meal: 333 Resistance: 357 Mar Oil: 3408 Resistance: 3622 Soybean trade faded to start the week in reaction to some surprise rains in Argentina over the weekend, but we have still held onto most of the January gains. The weekly net changes heading into Thursday are 12 cents lower on beans, meal is $5.30 lower, and oil is 28 points lower. The weekly export sales were good at 539,400 tons for beans, 276,800 tons of meal and 49,500 tons of soybean oil. The weekly export inspections remain strong at 1.29 million metric tons. Early harvest continues in Brazil with follow up rains needed in the drier spots in Argentina. The daily wire has seen some export activity this week. The weather should continue to direct trade as we enter February next week. Argentine production estimates have slipped, but overall we are still looking for a big South American crop. On the March soybean chart support is at the 10- day and highest major moving average at $10.55; resistance is at the $ month high. The next level of resistance would be the $11 area; then the March futures high last June at $ Hedgers call with questions or to discuss 2017.

3 WHEAT Kansas City Mar: Support: 428 Resistance: 457 Chicago Mar: Support: 414 Resistance: 440 Minneapolis Mar: Support: 539 Resistance: 594 Wheat trade has chopped lower this week in fairly quiet action with a lack of fresh news. On the March contracts, Chicago is 4 cents lower, KC is 5 lower, and Minneapolis is 11 cents lower. The weak dollar has continued to add a little bit of support. The weekly export inspections were only 275,206 metric tons, but the weekly export sales were good at 853,400 tons. This could help bring in some buying and keep the upside market trend in tact. The Minneapolis contract continues to hold a premium to the other contracts but the overall upside momentum has faded. The March KC $ day moving average is first support after the 10-day at $4.43 failed to hold; notable resistance is the $ day. Support is at the $ day moving average. Hedgers call with questions or to discuss your risk management plan.

4 CATTLE Support on Apr: Resistance: Support Mar Feeders: Resistance: Live Cattle has hovered near the upper end of the range this week with the market waiting for broader cash trade, and the cattle on feed report on Friday. Going into Thursday, live cattle were 130 lower on February, and 30 lower on April. The beef cutout has stayed sideways with choice just above $190 and select around $187. December cold storage stocks were a record which has limited upside in Cattle this week. The Fed cattle exchange has had light volume action in the $ range, with a broader test waiting until later in the week. The uptrend remains intact for now, but forward momentum has leveled off. Placements are expected to be higher again in the report, with nearby ready numbers remaining fairly tight. The monthly Cattle on Feed estimates range from % with an average at 99%. December Placements are expected to be at 108.4% of a year ago with marketings at 106.7%. The report will be released Friday. February chart support is at the 10-day at $ The $ month high printed on Thursday is resistance; this high is over $23 above the contract and multi-year low printed in October. Hedgers call to discuss your marketing plan.

5 LEAN HOGS Support on Feb: 6305 Resistance: 7005 *Support on Apr: 6600 Resistance: 7250 Lean hog surged higher on Wednesday with good demand and weather slowing hog movement. Going into Thursday trade was 160 higher on the April contract. Trade saw some profit taking early in the week, before the surging cutout and slower movement got buying going along, with a record low in pork belly stocks on the cold storage report. The futures are pricing-in optimism with April over $70 this week, and June within a dollar of $80. These are and remain good hedge areas for producers. The cutout has jumped back over $80, and cold temps should keep a check on carcass weights in the near term with poor road conditions acting as a limiting factor as well. Lower prices encourage demand; this economic principle continues to show itself as a supportive factor with the low prices the past 6 months. The USDA cold storage report on Tuesday showed a significant draw down in stocks. Frozen pork stocks were 15% lower than a year ago due to strong export demand. Belly supplies were down 67% and the smallest in the 60-year data set history. So bacon demand is arguably the largest supportive factor giving us this bull market. The overall cutout pushed back over $82 yesterday as well. On the April Chart support is at the $ day then down at the $ day. Resistance is at the $ month high. Hedgers call to set up a marketing plan. FUND POSITIONS Current FuturesOne Fund Estimate w/options CFTC with options 1/17 Corn +59 k +79 k Beans +161 k +167 k HRW Wheat +28 k +32 k Live Cattle +123 k +125 k Lean Hogs +58 k +61 k

6 Weather. Most attention is on South America, the US has seem moisture shrinking drought/dry areas.

7 DOLLAR INDEX The dollar index has been choppy but trending down to give back some of the post-election strength. Natural Gas Natural Gas has moved sideways this past week. Crude Oil Crude has been mostly sideways this week but challenging the bottom of the range.