HIGHLIGHTS
· MARKET TREND: CH, Down $.50 SH, Up $.0150; WH, Down $.0075; KWH, Down $.0075
· Global equity markets are mixed this morning—Asia is weaker as the Nikkei closed 2.3% lower and Australia dropped 1.2%. Europe has bounced back with mid-day gains ranging from 1.03% for the FTSE to 2.24%/2.36% for the CAC 40 and the DAX. The recovery was led by the banking sector. In the U.S., the focus is on Yellen’s remarks to Congress today and earnigns—futures have the DOW, +132; S&P, +19 ¼; NAS, +58. Externals: $ Index, +.061; Gold, -$15.30 @ $1,183.10; Mar WTI, +$.48
· T-storm Weather: Widespread coverage of near- and above-normal rainfall affects Argentina, Brazil, and Paraguay over the next 10 days as a series of systems and their cool fronts trigger thunderstorms. Thunderstorms recur every few days from Friday forward in Argentina, and gradually return to northern areas of Brazil this week and continue next week. The central U.S. remains divided by unseasonable warmth to the west and coldness to the east over the next week due to a large upper-level high anchored in the West. The threat for winterkill is very low with minimums only expected to reach the +0s in some SRW wheat areas, primarily Saturday morning
· CH, Down $.0150 @ $3.5950; CK, Down $.0175 @ $3.6425. Fund selling totaled 3 K
· SH, Up $.0150 @ $8.6475; SK, Up $.0050 @$8.6875. The funds were even SB, sold 2 K SBM and 1 K SBO
· WH, Down $.0075 @ $4.5675; WK, Down $.01 @ $4.6075 The funds sold 2 K Tuesday
CORN/SORGHUM   ;    
· ATI Research: At 1.837 bbu, the updated 15/16 U.S. corn carry-out estimate from the USDA exceeded the average trade guess by 22 million. Exports seem to have room for further downward revisions
· USDA increased 15/16 corn production forecast for Brazil by 2.5 MMT due to an improved yields for first-crop and larger double-crop area. Argentina crop boosted 1.4 MMT; producers planted more in response to export incentives
· T-storm Weather: Rain returns to Argentina Friday, further improving soil moisture for corn in driest eastern areas
· Ethanol margins: $0.16 per gallon—up from $0.10 last week but below $0.35 last year. EIA report at 9:30 a.m. CST
SOYBEANS/WHEAT
· ATI Research: USDA pegs U.S. 15/16 soybean carry-out at 450 mbu, just missing the average trade guess of 449. Of note was the 260 K MT increase to foreign soybean meal use, with this year’s total up 12.5 MMT v. last year
· T-storm Weather: Dry-hot weather in northern Brazil through Thu. spurs soybean harvest; rain returns this weekend
· ATI Research: USDA pegs U.S. 15/16 all wheat carry-out at 966 mbu vs. avg. guess of 949. Exports may decline further
· T-storm Weather: A stronger system potentially brings rain back into the central U.S. SRW wheat belt later next week
ENERGY
· Firmer: CLH16, +$0.48, $28.42; EBJ, +$0.78; EBJ-CLH, +$2.67, +$.29; RBH, +$.0186; NGH, -$.015; HOH, +$.0136
· EIA estimates: crude, +3.7 (API: +2.4); Gasoline, +1.0 (+3.1); Distillates, -0.9 (+1.7)
· Cash ethanol markets edged lower on Tuesday: Chicago declined 2 5/8; New York down 3; Gulf and Tampa slipped 1; Dallas off 1 ½; and LA was ½ lower at $1.54 per gallon
· Ethanol RINs were firmer: 2014’s up ¾ to 71-72; 2015’s gained ½ to 71-71 ½; and 2016’s added ½ to 71-71 ½
· The March RBOB/March Ethanol spread inverted further, up $.0362 to -$.5031 per gallon
LIVESTOCK/POULTRY   ;
· Choice boxed beef values declined 78-cents on Tuesday, and at $218.03 are down $4.44 compared to a week ago
· February live cattle futures closed $1.65 lower on Tuesday, the lowest settlement price for the contract since Jan. 21
· The USDA mandatory pork carcass cutout was 5-cents lower Tuesday, and at $76.68 is down 34-cents vs. last week
· CME Lean Hog Index gained $0.27 to $64.89. February futures declined $0.175 and are now $0.04 below the index
Sources: Bloomberg, Dow Jones, AP, T-storm Weather