AgriVisor Afternoon MarketWatch

Friday, December 18, 2015
***** Corn futures finish fractionally higher; soybeans rally 15 cents; Chicago wheat up by 1 to 2 3/4 cents. ***** 

   # The bears say not so fast and resume selling as grains approach technical resistance. Volume turned light, so a choppy trade followed. Soybeans rallied into the close.  
   # Traders look to be squaring positions ahead of the year’s end.  With funds still holding a bearish bet on the grains, that means short-covering. The large speculators are estimated to be net-short around 60,000 contracts of corn and 65,000 wheat.  Managed money is now close to even on the bean position.   
   # Soybeans benefited from news of another large export sale, this time 220,000 metric tons headed to an unknown destination.  Today’s sale brings the two-day today to more than 640,000 tons. Chinese crush margins are helping to boost export sentiment.  
   # There are not yet any indications that the Argentine farmer has reacted to the export tax cut or peso devaluation by becoming an aggressive seller.  Bears are finding that the news out of Argentina is not the immediate threat to prices that they had anticipated.  
   # It’s a volatile trade for the dollar in the wake of the Fed’s decision to raise interest rates.  Index futures finished lower after Wednesday’s announcement, rallied sharply on Thursday, and now trade moderately lower on Friday afternoon.  
   # Bulls were chattering about dry weather in Brazil on Friday.  The current forecast has only light showers in the mix for Mato Grosso and temperatures could run hot.  The Southern states are running a bit wet.  Farmers in Argentina are enjoying very good growing conditions for now.  
   # The wheat market has found some strength in December as production estimates start to fall back for growers abroad.  Crops in Russia and Ukraine benefited from rainfall in November, but winterkill is a threat as the region lacks snowcover.  Warmer temperatures have been mostly friendly to developing wheat in western Europe, but the lack of snowcover is a slight worry there too.  Dry soils are a discouragement for planting efforts in India.
   # Oil prices turned lower midday and helped further losses in the stock market.  Equites are not holding up well against Wednesday’s interest rate hike.  While higher rates are a signal of improved economic prospects in the U.S., worries still exist for economies abroad.    

***** Both live and feeder cattle futures finish Friday with limit-up gains; hogs end higher by $0.02 to $0.87. ***** 

   # Cattle traders took profits as they covered shorts ahead of the on-feed report.  The total on feed number was even with last year at 10.8 million head.  Traders were looking with something closer to 101 percent of the year-ago figure.  Placements were notably lower than anticipated at 89 percent.  Marketings were a little higher than the average trade guess at 104 percent.  
   # Hog futures were able to bounce out of technically oversold territory, but traders still comment on a bearish set of fundamentals.  Production is running at a record high as slaughters fail to slow as expected.