AgriVisor Afternoon MarketWatch

Monday, January 11, 2016
***** Corn futures drop 5 1/4 cents as soybeans give up 4; Chicago wheat down 9 1/4 and Kansas City wheat down 10 1/4. ***** 

   # Grains sink lower as Chinese economy worries persist.  Headwinds from markets like the energies and equities continue to weigh on the grains.  
   # No substantial short-covering observed on Monday.  Fund traders will likely head into report day with a record net-short held on corn, soybeans, and wheat.  
   # The currencies of our export competitors were down against the dollar on Monday.  Sizable moves were made by the Brazilian real, Argentine peso, and Russian ruble.    
   # A host of important crop reports will be published tomorrow.  The annual Crop Production report will be accompanied by updated WASDE balance sheets, a quarterly Grain Stocks report, and a Winter Wheat Seedings report.      
   # News circulated about a pending price cut for state-owned corn reserves in China.  The country is looking to bring down the size of their substantial corn stockpile. 
   # Weather has shifted toward the favor of growers in Brazil.  The dry areas of Mato Grosso and the Northeast will welcome rain this week as the overly wet areas in the South enjoy clear skies.  
   # Although cold weekend weather came as a shock after two months of mild temperatures, no U.S. records were broken.  Cold temperatures are expected to stick around at least through the end of the month while precipitation runs lighter than average.     
   # March corn futures dipped below $3.50 briefly on Monday, but settled above that mark and did not test the contract’s $3.48 1/2 contract low.  Last week’s $3.60 high is immediate technical resistance.  March soybeans were turned away from their 20-day moving average on Monday but still trade with some room above their $8.47 contract low.  
   # Alcoa’s report kicks off U.S. corporate earnings season this afternoon.  Traders suggest that the stream of earnings data should help U.S. equities decouple from shaky Chinese markets over the next several weeks.   

***** Live cattle down $0.27 to $0.80 as feeders drop $0.82 to $1.10; hogs steady to $0.17 higher.  ***** 

   # Cattle futures fell as traders priced in lower cash trades from late Friday afternoon.  Deals in the wholesale market remain firm with choice cuts up $3 and select higher by $2.45 as of midday.  February futures held technical support from the 20-day moving average after facing resistance from the 50-day.
   # Hog futures held steady in the front of the curve and made slight gains in the back as higher cash and wholesale prices helped prop up the market.  Traders were talking about a technical glitch shuttering Smithfield processing plants in the Midwest.