AgriVisor Morning MarketWatch

Friday, January 08, 2016
***** Corn futures up 1 1/4 cent; soybeans higher by 3 cents; Chicago wheat up a penny. *****
   # The overnight session paints a rosier picture for markets relative to the first four sessions of the week.  Grains are up, stock futures are up, oil is up.  
   # At the root of this week’s market troubles was volatility in Chinese equities.  On Thursday evening, Chinese policymakers decided to scrap a newly-implemented circuit breaker system, which restored some confidence to the market on Friday.       
   # With all of the unease in outside markets, the grains could be said to have held up relatively well this week.  While the S&P 500 starts the year off with a tumble of 5 percent, corn futures are off about 4 cents, wheat down 2, and soybeans up 5.           
   # Another round of showers are expected to roll through the driest areas of Brazil this weekend.  Growers in Mato Grosso and states northeast will welcome the moisture after having run short by about 10 inches of the normal rainfall over the last 30 days.    
   # Trade estimates for the January 12 crop reports are circulating this week.  The average guess of analysts polled by Reuters has corn ending stocks unchanged from the USDA’s December estimate of 1.785 billion bushels.  Those analysts look for soybean carryout to creep just slightly higher from 465 to 468 million bushels.    
   # There is little consensus over what to expect out of the USDA as far as yield adjustments next week.  Last year, USDA revised corn yield lower by 2.4 bushels per acre and upped soybeans by 0.3 bushels.    
   # A back and forth trade on Thursday left fund traders still short by nearly 150,000 contracts.  Added to net-shorts on soybeans and wheat in the order of 60,000 and 80,000 contracts, respectively, the bearish fund position creates has approached record size.          
   # The December jobs numbers were reported this morning.  Nonfarm payrolls grew by more than anticipated at +292,000, but the unemployment rate also came in higher than anticipated at 5 percent.                      

***** Cattle and hogs look to capitalize on technical support and a friendlier start in outside markets when futures open. ***** 

   # Cattle futures are turning back lower as traders suspect the cash market would be unable to keep up with wholesale gains as of late.  Outside market pressures and technical selling were added headwinds.  
   # Weakness in the cattle and uneasiness over China and related outside market volatility triggered some profit taking in the hogs on Thursday.  A correction lower won’t be out of the question, but a gradual bullish turn in the fundamentals should continue to support prices over the next several months.