Agrivisor Afternoon Marketwatch

Monday, January 04, 2016
***** Corn futures ended 6-7 lower; soybeans 7-10 lower; and Chicago wheat 11-12 lower.  ***** 

   # Weak Chinese economic news set off a flight from their equity markets to start the year.  The break was hard enough, 7% on the Shanghai index, to trigger circuit breakers, temporarily stopping trading.  The weakness their Yuan has had is helping trigger an exodus of investment money out of China.  But the hard break in their stock markets triggered the same in other Asian markets, in Europe, and in the U.S.  At one point our Dow Industrials were off nearly 500 points today.  That break was behind the weakness in a lot of markets, including grain markets.
   # Reports out of Russia indicated weekend snow showers were a little more widespread than expected, and may limit winter kill from the current cold conditions.  
   # Weekend showers lived up to expectations across the center/west areas of Brazil, tamping down any anxiousness about this year’s soybean crop for now.  Early yield reports have been highly variable depending on individual circumstances.  Conditions will dry the next few days, but the longer range outlooks include showers again this weekend, as well as better potential after.  And temps are expected to be a little on the cool side.  Rains continue in southern areas, although not as heavy.  Heavier rains seem to be a part of forecasts for Argentina, and they need to see a drier pattern.
   # Export inspections were mixed.  The 55.5 mln. bu. soybean number was good, but the 12.8 mln. numbers for wheat and corn were a little disappointing, especially for corn.  But it was a holiday week. 
   # Colder weather is forecast for the Midwest and eastern parts of the U.S., but moisture amounts aren’t expected to be troublesome, and that’s mostly good.  The Miss River has peaked at Cape Girardeau, Mo. and is peaking at Cairo, Il. on the Ohio, so transportation issues may not be extremely long lasting on the river system. 
   # The weekly trader reports released today because of the holiday showed trading funds selling more wheat, corn, and soybeans, adding to shorts on the first two, and staying near balanced in soybeans.           
   # Monthly condition reports indicated the winter wheat was 58% good/excellent in Illinois and 54% g/e in Kansas.   
   # Crude oil markets were 2-sided to start the week, with the rising tensions between Iran and Saudi Arabia being supportive, while the stock market weakness worked against it.
***** Live cattle futures ended the day $0.37 lower to $0.05 higher, feeder futures were $0.72-$1.02 higher, with lean hogs $0.50-$0.12 lower. ***** 

   # No doubt the stock market collapse worked against the livestock markets like they did the others.  Ongoing strength in wholesale beef, up another $5 today, countered the weakness.  The return to full slaughter weeks is expected to bolster packer demand. 
   # lean hog futures were more temperate, with the cash trade more subdued, albeit higher.  Market ready supplies are expected to be readily available.  Lean hog futures still carry a big premium to the cash index.