AgriVisor Afternoon MarketWatch

Monday, December 21, 2015
***** Corn futures fall 2 cents across the curve; soybeans also down 2; Chicago wheat gives back 4 3/4 to 6 1/2. ***** 

   # Quiet day on the news front for grains. Year-end and pre-holiday positioning was the market’s major feature.  There was only light chatter about last week’s main drivers, e.g., the Fed rate hike and Argentine peso devaluation.    
   # Strong export inspections failed to draw much attention.  Corn shipments were up on the week to 28.3 million but down from 31.6 a year ago.  Soybeans inspections were 53.8 million, down from 84.3 achieved this week last year.  17.5 million bushels shipped for wheat.     
   # Grains were dealing with some technical resistance to start the week.  March corn lost support from the contract’s 20-day moving average after backing away from the 50-day on Friday.  March soybeans fell back below their 100-day.  
   # Talk was circulating about a potential cut to Russia’s wheat export tax.  The Black Sea exporter has used taxes and quotas to help protect consumers from food price inflation.  The announcement comes as traders make much ado about Argentina’s grain export tax cuts.  
   # Managed money was shown to have built a net-long position in agriculture commodities during the last reporting week.  The CFTC still counted funds short by 40,000 corn contracts.  They held a net-short on soybeans of 30,000 and a net-short on wheat of 48,000. Analysts are citing the approaching year end as reason for short-covering.
   # El Nino is expected to hurt sugar production in Brazil this year.  Dry weather in the Northeast will threaten yield as wet conditions in the South delay harvest and negatively affect quality.  
   # Drought conditions have been relieved in the Southern Plains after beneficial rains have fallen in recent weeks.  Slight drought has developed in parts of Indiana, Michigan, and Ohio.  “Exceptional” drought still exists in California and states in the far West. 
   # Lower crude oil prices limited upside in the stock markets.  Equities were recovering just a fraction of losses incurred in the wake of the Fed’s interest rate hike last week. Treasuries were mostly firmer on the day.  Dollar index futures were down moderately.      

***** Both live and feeder cattle futures reached the upper end of expanded trading limits; hogs were fractionally changed in early afternoon trading. ***** 

   # Cattle were locked limit up for most of the day after a bullish on-Feed report encouraged the buyers.  Placements were down 11 percent on the year-ago total.  As of midday, choice beef had fallen $1.54, select down by $1.07.    
   # Hog futures were unable to build momentum after a stronger start to the session and did not enjoy any spillover strength from the cattle rally.  Higher pork prices helped to provide some support to the board as the carcass average climbed $1 by midday.