Morning MarketWatch: Grains giving back Tuesday's gains as traders digest export report

Thursday, November 05, 2015
***** Corn futures down 2 1/4 cents at the break; soybeans down a nickel; Chicago wheat off 3 3/4 to 4 3/4. ​*****
   # Same story for the grains on Thursday morning, with futures trading quietly overnight on limited fresh news.  Ranges for corn and soybeans so far this week are just five and nine cents, respectively.   
   # It may have been a slow, sideways trade for corn and soybeans so far this week, but trade in the wheat market continues to be active.  Some export activity has been featured, as have continued worries about growing conditions abroad, especially in Russia and Australia.     
   # Chart traders should help guide the trade into week’s end.  As volatility compresses in the corn market, futures are trading right on a converging set of the 10-, 20-, and 50-day moving average.  $8.75 is lending technical support the most-active January soybean contract.  Monday’s $8.91 1/2 high serves as resistance overhead.       # More rain for Mato Grosso means additional relief for the dry soils that were threatening to early-season soybean conditions.  Other major growing regions like Rio Grande in the South are getting too much rain.        
   # The United Nations’ Food and Agriculture Organization (FAO) reported a 4 percent gain for their Food Price Index last month.  Analysts from the organization cite rising sugar and palm oil prices.    
   # Stronger palm oil prices helped support soy futures on Wednesday, but prices in the Malaysian market fell back on Thursday.  Still, U.S. soy oil prices are steady overnight and futures are up more than 10 percent from contract lows made in late August.     
   # Energies are staging a mild recovery on Thursday morning.  Oil and products were higher on Wednesday morning only to reverse sharply lower into midday.  The weekly stocks update showed U.S. crude inventories building by 2.8 million barrels.     
   # The dollar is gaining against major currencies on Thursday morning.  Index futures are approaching 6-month highs after having gained nearly five percent over the previous three weeks.              
   # Traders are pricing in a higher chance for a December interest rate hike after Federal Reserve Chair Yellen testified in front of congress on Wednesday.  Bond market readings suggest a 58 percent chance of a December adjustment.        

***** Cattle futures likely to continue lower at the start; hogs futures look poised for a rebound at the open. *****
   # An ugly day for the cattle on Wednesday as futures drop the daily limit.  The technicals are weak and bearish seasonal expectations continue to be self-fulfilling, leading funds to liquidate remaining bull bets.            
   # Pork prices continue to head lower to balance out large inventories and slowing demand.  Weaker pork prices weigh on the cash market and have sent hog futures toward lifetime contract lows.