AgriVisor Morning MarketWatch

Wednesday, January 06, 2016
***** Corn futures down 1 1/2 overnight; soybeans off 4; Chicago wheat lower by a few. ***** 

   # It remains risk-off for traders in all major markets.  Grains are down moderately overnight while crude futures tumble and stocks index futures are down hard.  North Korea’s disputed claim of a successful hydrogen bomb test and more market weakness in China help create unease.    
   # Tuesday started off with some light short-covering activity, but fund traders still hold sizable bearish bets on the grains.  Managed money has amassed a net-short in corn futures and options that is something near 150,000 contracts.         
   # The dollar index creeps ever closer to the 100 point mark.  The currency had lost some steam against many of its major exchange partners in December, but has lately been an attractive holding for investors looking for a safe-haven play.         
   # Dollar strength against the currencies of our South American trade competitors has been an added headwind for U.S. grain prices this week.  The Brazilian real is slipping back toward the record low that was made in September as the Argentine peso continues to depreciate after the new government lifted currency controls.   
   # While soybean futures are hovering just above their November lows, soyoil contracts still maintain about a 10 percent gain over theirs.  Strength remains in edible oil markets as traders attached premium to weather worries related to El Nino.    
   # Egypt is having trouble securing financing for grain imports and three cargoes of French wheat have been held up as a result.  There has been lingering worry that the state’s buying authority would have such credit difficulties and it doesn’t bode well for wheat export demand.                  
   # Comments from the last Federal Reserve meeting will be released today at 1 p.m. central.  Traders will look to see how the Reserve Board will handle subsequent interest rate increases after its initial 0.25 percent hike in December.    

***** Cattle and hog futures facing technical resistance at the open with outside market weakness a further headwind.  ***** 

   # Cattle futures face a near-term headwind from bearish outside market influences.  The live contracts also face key technical resistance, with the most-active February bumping up against its 100-day moving average, a mark it hasn’t cross since July.  
   # Hog futures are approaching short-run overbought territory, but still maintain solid technical support.  February futures close above their 50-day moving average on Tuesday and will look to make a test of the 1-month high at $61.75.