Agrivisor Afternoon Marketwatch

Thursday, January 07, 2016
***** Corn futures ended fractionally changed; soybeans mostly fractionally lower; with Chicago wheat 4-6 higher. ***** 

   # Check Closer Look page for trade expectations for the Jan 12. USDA reports.
   # The key events of the day were still tied to economic news in China and their stock markets.  The Chinese govt. allowed the largest one-day decline in the Yuan in 5 years, triggering more economic uncertainty.  The break set off a wave of selling in their stock markets, with values quickly hitting the 7% target that triggers suspension of trading.  That put stocks and commodities on the skids around the world, with the energy markets feeling the most pressure in the commodity sector.  U.S. crude prices initially fell below the late 2008 low, but quickly rebounded, ending the day slightly above it. 
   # The Dollar was firm in the early trade with the economic uncertainty, but slid through the day with traders locking in profits on long Dollar positions.  It was especially weak against both the Euro and the Yen.  U.S. December employment numbers will be released Friday morning.  There is some thought that weak numbers will enhance a go slow approach by the Fed on monetary policy.
   # Export inspections were neutral/negative, with the soybean numbers the best.  The 638,800 tons of soybean sales were only as expected.  The 252,900 tons of corn sales were less than expected, with wheat’s 76,500 tons of sales best deemed dismal.  Still, all came during a holiday week that oft times can be slow.  On the daily system, the USDA reported China bought 246,000 tons of soybeans. 
   # The USDA Ag. Attaché cut his estimate of the Brazilian soybean crop 0.5 mmt. to 98. mmt.  Weather forecasts remain generally good for Brazil and Argentina. 
   # California rains/mud slides is generating talk about the similarity to the winter of ‘82/’83, bringing to mind the drought that followed in summer ’83.
***** Live cattle futures fell the 300 point limit; feeder cattle were down the 450 point limit, lean hogs were $1.27 to $0.47 lower. ***** 

   # Cash cattle traded in the low $130s finally, triggering profit taking on futures that had been carrying a good premium to the cash market.  There’s talk the surge in wholesale beef prices has been too much, too fast, setting it up to slip lower.
   # Cash hog prices were again close to steady, with packers still able to readily buy all the hogs they need to keep plants running near capacity.  Wholesale pork demand is still relatively strong, but not strong enough to overcome the supply of pork entering the pipeline yet.