AgriVisor Morning MarketWatch

Tuesday, January 19, 2016
***** Corn futures up 4 cents ahead of the morning break; soybeans higher by 4 3/4 to 7 3/4; Chicago wheat up 3 1/2. *****
   # It’s risk-on for major markets on Tuesday morning with higher grains supported by rallying stock index futures and a healthy rebound for oil prices.            
   # The grains are likely benefiting from some short-covering after Friday’s report showed fund traders increasing their bearish corn bet by nearly 25,000 lots.  Managed money was net-short by about 45,000 contracts as of last Tuesday’s end to the reporting week.       
   # Data from China pegged the country’s growth rate at 6.9 percent for the full year of 2015, which was higher than most had expected. The report, coupled with higher Chinese stocks, allowed global equity traders to take on some optimism this morning. 
   # Soyoil futures were the leader of the soy complex on Tuesday morning as a stronger Asian palm oil market provided further support.  Edible oils have outperformed in recent months as traders price in El Nino’s disruption to palm production in Malaysia and Indonesia.     
   # Dollar index futures – tracking the U.S. dollar against the euro, yen, pound, Canadian dollar, krona, and franc – are higher overnight, but the dollar is losing ground against the Brazilian real.  The Russian ruble is rebounding after the currency hit a new low at the start of the week.
   # South African corn production could fall by 25 percent this year as drought conditions persist.  Growers there were unable to plant a large portion of intended acres because of the dry weather.  The country will eventually have to turn to the world trade market to source grain.        
   # Showers fell across some of the driest areas of Brazil this weekend.  More rainfall is forecasted for Mato Grosso over the next few days, but dry weather may return after this week.  Conditions were favorable through the start of the growing season in Argentina, but weather is starting to lean a little dry.   
   # The economic calendar is bare today, but the earnings calendar has some notable listings.  Bank of America and Morgan Stanley report fourth quarter earnings today, as do eBay, Netflix, IBM, and Delta Air Lines.  

***** Cattle look to open lower on today’s expanded-limit session; hogs would face pressure from cattle and from chart resistance. *****
   # Cattle futures face pressure as sellers look to close the chart gaps opened on December 21st.  Cash prices that were generally $1 better than the previous benchmark failed to spark any enthusiasm at the close of last week.  Wholesale prices had also stalled to help weigh on the board.   
   # There continues to be some desire to buy as supplies start slowly tightening.  Cash and wholesale prices need to do some work to catch up to the board if futures are to maintain strength.