AgriVisor Morning MarketWatch

Wednesday, January 13, 2016
***** Corn and soybeans fractionally mixed in tight overnight ranges as wheat markets give back a small portion of yesterday’s gains.  Outside markets are largely supportive. *****     

   # With outside markets showing some stability, grain traders will spend more time digesting Tuesday’s crop reports.    
   # Analysts will soon switch their focus toward the next U.S. crop with planting intentions first up for debate.  We will look to see if the board buys any acres.  The new-crop soy/corn multiple has risen steadily since early fall.   
   # The USDA’s reluctance to adjust Brazil’s soybean production estimate helps leave the subject open plenty of speculation.  Larger acreage and better productivity is expected to provide growers there a record crop, but early-season dryness in the top growing regions has taken the top end off of production prospects.      
   # The palm oil market was the follower instead of the leader on Wednesday, making gains in response to the U.S. soybean rally.  The larger edible oil market is supported by palm production losses caused in Asia by El Nino. 
   # Some light snow showers could fall across the Midwest this afternoon, but winter storms are likely to stay at bay for the rest of the week.  Cold weather will stick around until temperatures climb back to average late in the month.  
   # Global equity markets are showing strength in a manner that decouples them with a Chinese stock market that fell yet again on Wednesday.  Crude oil prices are staging a moderate rebound after the WTI contracts dipped below $30 this week.  The dollar continues to rise against the major foreign currencies.             

***** Cattle and hogs look to start weaker in a test of chart resistance. ***** 

   # Cattle futures continue on a downward correction, one that could now slow in pace until traders get to take a look at how the late-week cash trade develops.  The February contracts has made a 38 percent retracement of the recent move up, but may be headed toward the large gap opened on December 21st.      
   # Bear spreading has helped define the hog trade this week, but the entire curve finds general support from improved optimism over the direction of cash and wholesale markets.