AgriVisor Morning MarketWatch

Wednesday, December 23, 2015
***** Corn fractionally higher ahead of the break; soybeans steady; Chicago what up a penny.​ *****

   # Most commodities trade slightly firmer overnight, with the exception of metals, which are posting only minor losses. Outside markets are mostly supportive the grains with WTI crude trading 50 cents higher, stock index futures up, and the dollar steady.   
   # March corn futures are slipping back for a test of technical support. Last week’s break to $3.62 1/2 established the contract low.  The soybean charts look stronger with March futures above the 20- and 50-day moving averages. Short-run momentum studies are turning positive.                        
   # We will look to see if the bears muster up any follow-through now that corn future are back near contract lows.  There isn’t much indication that the fund traders want to rebuild their big bear bet before the year’s end.  But, the bulls aren’t likely ready to wage a wholesale buying campaign at this time either.     
   # Fund traders are estimated to be net-short by about 38,000 corn contracts, 10,000 soybeans, and 45,000 wheat.  The large speculators are short soymeal but have recently doubled down on a big soyoil long.        
   # Palm oil prices inched higher in Malaysia on Wednesday. That market is turning bullish on production worries related to El Nino and the recent price strength for edible oils in Asia has supported a turn up for U.S. soyoil prices.       
   # After most of the country enjoys an unseasonably warm Christmas, the Midwest will brace for what could be a big snow.  A winter weather mix will be a worry for livestock producers in the Plains but rain or snow would be welcomed by winter wheat growers there.      
   # Rains have popped up in Mato Grosso, Brazil this week, providing some much needed relief from the drought conditions that have developed in the major soybean-growing state. El Nino has been disruptive to the rainy season so far in the Center-West and Northeast regions of the country.      
   # Outside markets are no different than the commodities, having fallen into holiday mode where light volumes and a lack of news are the main trade feature.  U.S. stocks look to be stabilizing after the initially-negative reaction to the Fed’s interest rate announcement.  Treasuries are rather choppy as higher rate prospects are priced against flight-to-quality buying.      

***** Cattle futures may start on the defensive, but higher settlements won’t be a surprise; hogs look to start steady to firmer. ***** 

   # Cattle futures are on an impressive three-day rally run and there are indications that the board may be able to sustain the strength, at least in the very near-term.  A Cold Storage report that showed a lighter-than-expected inventory count may help.  A new need for premium related to developing winter weather concerns in the West may also lend support.
   # Hogs could benefit from a Cold Storage report that leaned slightly friendly.  But, traders know that while pork stocks are a little lighter than expected, they are still high.  Anyway, traders are not likely to do much with the Cold Storage report, not when it comes just ahead of the much more important quarterly Hogs and Pigs report due out this afternoon.