AgriVisor Morning MarketWatch

Wednesday, January 20, 2016
***** Corn futures down a penny ahead of the break; soybeans down 5 1/2 to 6 1/2; Chicago wheat off by 4. *****

   # Grains are on the defensive this morning as volatility ratchets back up for oil and equities.  Grain-specific news is rather limited so far today.             
   # Further oil weakness sparked a global equity rout.  Analysts expect the Thursday stocks report to show inventories building by 2.75 million barrels last week.  WTI crude futures have closed lower in 9 of the first 10 sessions of the new calendar year.         
   # The early-session slump for grain futures does not bode well technically.  Tuesday’s rally had put March corn up against resistance from the 50-day moving average, while March soybeans reached the 100-day.                 
   # Action in the currency market is bearish the grains this morning.  The Brazilian real is down about one percent against the dollar as the Argentine peso also falls.  Both the Russian ruble and the Mexican peso are down to record lows against the dollar. 
   # The outlook has turned hot and dry for the southern half of Brazil week, a turn of events for states like Parana, where too much moisture had been troublesome early in the growing season.  Drier conditions could spell trouble for growers in areas that did not receive the same December rains, like Rio Grande do Sul.          
   # Soyoil prices were lower and weighing on the complex overnight.  Malaysian palm oil export data showed an unanticipated dip in sales last week.
   # Falling oil is the main focus of stock traders today, but they will also have to digest a Consumer Price Inflation (CPI) report and some data on housing starts.  Goldman Sachs and Kinder Morgan are a couple of notable earnings reports scheduled for today.   
***** Cattle look to open weaker as hog futures start with a test of technical support. ***** 

   # Cattle futures closed an open chart gap on Tuesday but still have one left open below the market.  A stalled advance for wholesale prices will now pressure the board as traders wait for the cash market to develop.     
   # Good gains in the cash and wholesale market lend the front of the hog futures curve some support.  The charts still lean bullish for hogs, but futures will face some pressure from outside market weakness when they open for trading.