AgriVisor Afternoon MarketWatch

Wednesday, January 06, 2016
***** Corn futures end steady/firmer after spending most of the session lower; soybeans tack on 5 1/4 to 8 cents; Chicago wheat higher by 1 1/2. ***** 

   # Grains started on the defensive as a host of bearish outside market influences weighed on prices.  Futures made a failed attempt to find strength by mid-morning before finally tacking on small gains by settlement time.  
   # This week’s ethanol report featured another round of big numbers. Production of the fuel alcohol was up slightly on the week and up nearly 5 percent on the year prior.  Corn grind was a solid 104.6 million bushels and comfortably above the 98.7 million needed per week to meet the USDA’s current usage target for 2015/16.   
   # The closely-watched analysts at Informa released an updated set of estimates for South American crop production.  Their forecast for the Argentine corn harvest is up 1 million metric ton to 22 mmt. The estimate for the country’s soybean harvest is unrevised.  Also unrevised is Informa’s estimate for Brazilian soybean production at 101.4 mmt (versus USDA at 100 mmt).  
   # Still no daily export sales to report; USDA will release the weekly tally on Thursday morning.  Traders estimate we will see new corn bookings near 20 million bushels, soybeans also near 20 million, and wheat around 10.  
   # Cold temperatures will stick around for at least another week.  The National Weather Service’s 6-10 and 8-14 day outlooks both trend drier than normal.    
   # Crude oil prices tumbled sharply on Wednesday.  The government’s weekly stocks report had domestic inventories declining by 5.1 million barrels, but stocks of gasoline and blending inputs were higher. WTI futures broke to new contract lows on the move.  
   # The oil weakness helped weigh on global equity markets, as did more signs of economic trouble in China and uncertainty over a reported bomb test in North Korea.  Later in the afternoon, stocks were further pressured by Federal Reserve minutes that hinted toward Board Governors having some trepidation over the December rate hike.  

***** Live cattle futures fall fractionally as feeders lose $0.17 to $0.45; lean hogs down $0.20 to $0.37. ***** 

   # Cattle futures are finding some difficulty in sustaining strength as traders suspect the wholesale market has done all it will do here in the near-term.  A sharp run-up in boxed beef prices has been a result of improving sentiment over demand.  
   # Hogs slipped fractionally lower on the day but a two-day gain in the pork market helped provide support.  Also supportive to the board were technical influences that are leaning increasingly bullish.  The February contract will have its next important test of resistance just ahead from the December 11 high of $61.75.