AgriVisor Morning MarketWatch

Friday, December 04, 2015
***** Corn steady for most of the overnight session; soybeans down 3 cents across the curve; Chicago wheat higher by 1 to 3. ​*****

   # Corn futures start off Friday trading very light volume.  Thus, overnight ranges are little more than a penny.  Soybeans trade lower as futures approach technical resistance.  Wheat futures continue higher with some slight momentum from Thursday’s rally.    
   # Dollar volatility has been the theme of the week.  The European Central Bank dropped the main deposit rate by 10 basis points, but still the euro rallied on Thursday.  Dollar futures broke hard on the news, just as futures had retaken the 100 mark.   
   # The dollar break was bullish enough for the grains to offset a weak export sales report.  Corn and soybean sales were behind the average trade guess on Thursday.  Still, the outlook for exports is improving after a slow start to the marketing year.   
   # Analysts are all over the board with their estimates for Brazilian soybean production.  Informa upped their guess on Thursday to 101.4 million metric tons while some predictions call for 95 million or slightly below.  USDA’s November forecast was 100.  
   # Corn basis values remain firm for much of the Midwest, but producer sales are starting to pick up ahead of the new tax year and threaten the cash-to-futures difference.  Farmers are still likely to hold on to more grain than normal as long as prices maintain such a discount to the currently-desired $4 level.  
   # There is concern that this year’s strong El Nino will eventually give way to a La Nina event.  While El Nino could threaten crop production in parts of South America and Asia this winter, La Nina is often associated with crop troubles in North America.  Meteorologists suggest that La Nina is no more likely to follow an El Nino event than not.   
   # The European Central Bank’s decision to raise interest rates was the spark for Thursday’s financial market action.  Traders thought the move wasn’t enough to combat deflationary pressures in the euro zone.  Soon enough will be the U.S. Federal Reserve’s turn to make a decision on interest rates.   

***** Cattle futures look to the cash market for guidance into the week’s end; spreading and technical trading to define action for hog futures. *****
   # Cattle futures fell further on Thursday as traders found cash markets trading lower than anticipated.  Wholesale prices may lend some support to the board if they can hold firm going into the end of the week.    
   # The pork cutout continued higher on Thursday, but direct hog prices fell back.  February futures face technical resistance from the overhead Bollinger Band but will look to find support from their 20-day moving average.