AgriVisor Afternoon MarketWatch

Wednesday, January 20, 2016
***** Corn up a penny on the session; soybeans drop 6 1/4 to 9 1/2 cents; Chicago wheat down 3 to 4.​ *****

   # Grains were on the defensive throughout most of the session as risk-off sentiment spread through the major markets.  U.S. equities were down hard on weak earnings, disappointing economic data, and more China worries.  Tumbling oil prices didn’t help any.   
   # March corn futures could not best Tuesday’s high but did settle above its 50-day moving average. Nearby soybeans slipped under the 100-day but closed above support from a converging set of 10-, 20-, and 50-day averages.     
   # There continues to be some short-covering at hand here for corn after last week’s trader positions data showed funds holding a net-short of more than 175,000 contracts. 
   # USDA announced a large corn sale, 9.6 million bushels headed to Mexico in 2015/16. South Korea also made a small purchase overnight. The flash sales come after a 4.4 million bushel sale reported on Tuesday. 
   # Soybean futures are dipping relative to corn after the bean/corn ratio made steady gains through the last month. Some repositioning from the fund crowd may be sparking the move as traders price in new expectations for 2016 planting intentions.  
   # Snow fell across the Midwest on Tuesday evening but accumulated totals are likely to pale in comparison to what will be brought by a major winter storm headed for the Northeast this weekend.  The two-week outlook still has temperatures warming to above-normal levels for most of the country.     
   # More snow is headed for Russia and Ukraine.  Wheat growing in the Black Sea region will enjoy some added protection from very cold temperatures.  Growing conditions are mostly favorable elsewhere abroad.  A two-week forecast for some drier South American weather will be monitored closely.                  
   # Commodities were the weak link in a CPI reading that dropped 0.1 percent in December.  Most economists were looking for a gain of 0.1 percent.  Items excluding food and energy (the ‘core’ CPI rate) did rise by 0.1 percent on the month. 
   # In another bit of disappointing economic news, housing starts fell by 2.5 percent in December versus a consensus expectation for a small increase.     

***** Hogs down $0.62 to up $0.37; live cattle decline $1.17 to $1.42 as feeders drop $1.17 to $2.05. ***** 

   # Technical selling and pressure from outside markets weighed on cattle futures.  The cash market is quiet and may remain relatively so through this week, which will end on Friday with a Cattle on Feed report.    
   # For the second session this week, the front of the hog futures curve was support by firmer pork prices. The midday carcass average was up $1.19 to $74.65.  Cash trades in the Western Corn Belt were reported $0.87 higher.