AgriVisor Morning MarketWatch

Tuesday, January 05, 2016
***** Corn futures up 2 cents ahead of the break; soybeans higher by 3 1/2 to 4 1/2; Chicago wheat fractionally firmer. ***** 

   # Grains making a moderate rebound after Monday’s rout. Traders continue to approach financial markets with uncertainty as questions linger about the health of China and other emerging market economies.  Stock futures point to a lower open for the major U.S. indexes.  There is flight-to-quality buying in U.S. treasuries, the dollar, yen, and gold.  
   # Some light short-covering is evident overnight after the weekly Commitment of Traders report showed funds holding net-short grain positions that were larger than anticipated.  The large speculators had amassed a net corn short that totaled 140,000 contracts.       
   # The forecast in Brazil looks favorable for crops over the next few weeks. Mato Grosso and the Northeast will trend wetter after a dry start to the growing season while Parana and the South will enjoy a chance to dry out a bit.        
   # Meteorologists in Australia say that cooling water temperatures in the equatorial Pacific Ocean mean El Nino is likely on its way out but that it will take at least a few months to fully dissipate.  
   # Winter wheat conditions in Illinois deteriorated slightly on the month. The crop is rated 3 percent very poor, 12 percent poor, 27 percent fair, 48 percent good, and 10 percent excellent. Conditions are good in the Plains, with Kansas rated 54 percent good or excellent and Oklahoma at 77 percent.             
   # The CFTC’s Commitments of Traders report has been delayed until today due last week’s holiday.  Fund traders still hold sizable net-shorts on corn, soybeans, and wheat.      
   # USDA issued a Grain Crushings report on Monday.  Corn ground for ethanol and other alcohols totaled 484.5 million bushels in November, down slightly on both last month and the prior November.
   # U.S. financials traders will focus largely on news from outside economies until they get a look at Friday’s unemployment report.              

***** Cattle futures likely to start steady/lower as hogs work higher from technical support.  ***** 

   # Cattle futures had little chance to continue higher on Monday after they opened with pressures from outside markets.  Still, the fundamentals are shaping up better.  Cash markets have improved on good demand in the wholesale market.    
   # Hogs should continue to find support from a wholesale pork market that looks to be in the process of bottoming.  Technicals are shifting bullish for futures.