AgriVisor Afternoon MarketWatch

Tuesday, December 22, 2015
***** Corn futures fall drop another 5 to 5 3/4 cents; soybeans down 6;l Chicago wheat weaker by 6 1/2 to 7 1/4. ***** 

   # Not a good day for the grains as corn, beans, and wheat all drop more than a nickel. Volume was light, so futures snowballed lower once early morning gains failed to hold.  Fresh news was again limited throughout the session.      
   # Favorable action in outside markets didn’t help the grains any.  Crude oil futures were able to halt a four-session slide and the dollar fell against most currencies.  
   # Rains falling across the dry areas of Brazil was a negative influence for U.S. grain prices on Tuesday.  Parts of Mato Grosso and north enjoyed stormy weather that brought up to a couple inches of rain with it. Precipitation still falls well short of normal in the region for this time of the year and a strong El Nino may keep it that way during the early part of 2016.   
   # Estimates are all over the board for Brazilian soybean production.  With the USDA currently standing at 100 million metric tons and Brazil’s Conab at 102.5 mmt, both governments’ projections look high compared to private guesses of 95-98 mmt.     
   # Corn and wheat are performing worse than soy this week as worries resurface over the pace of grain exports.  Accumulated corn exports are 28 percent lower than they were a year ago this time, yet USDA estimates total sales will only drop 6 percent.  It’s been dismal for the wheat program all year and the export outlook is threatened further this week by news that the Russians will cut their trade taxes.  
   # The two-week forecast is wet for the Midwest, but the one- and three-month outlooks remain drier than average.  Temperatures are expected to stay unseasonably warm through at least February.     
   # U.S. equities were trading higher on Tuesday to help recover just a small portion of losses incurred late last week.  A few bits of data on the domestic economy were digested, including a positive GDP report and negative home sales report.  Ultimately, positive sentiment prevailed after buyers heard that China may be willing to implement more accommodative monetary policy measures.         

***** Live cattle futures gain $0.85 to $2.67; feeders higher by $1.15 to $3.70; hog futures settle firmer by $0.55 to $0.87. ***** 

   # Cattle futures started off the session by making just a mild retreat but quickly regrouped and headed higher.  The bulls were glad to see cash bids rising $2-3 over last week’s trade.  A favorable shift in technical considerations helped propel futures higher as well.  
   # Hogs avoided making new lows last Thursday and trend slightly higher so far this week.  Traders on both sides are cautious ahead of Wednesday’s Hogs and Pigs report.  Before the numbers are released, the market will first digest this afternoon’s Cold Storage report.  At 561.9 million pounds, pork inventories were down on the month, a little lighter than anticipated, but still very high compared to the year-ago figure.