AgriVisor Morning MarketWatch

Thursday, January 21, 2016
***** Grains are steady to slightly firmer with corn the best performer.  Corn futures are building on technical momentum while soybean bulls are working to keep technical support. Wheat futures continue to consolidate after the big report day move. *****              

   # U.S. stock indexes continue lower as intervention from the Chinese government failed to stem losses in Hong Kong or Shanghai.  Oil remains a drag on sentiment, with WTI futures falling for what would potentially be a lower close in 12 of the year’s first 13 sessions.
   # Dollar index futures continue to consolidate with the front month hovering in the low 99’s.  Some volatility could be added to the dollar market depending on comments from the European Central Bank (ECB) president today.  The dollar is higher against the Brazilian real and making a new record high against the Russian ruble.                 
   # Fund traders remain bearish on the grains, still net-short short by more than 150,000 contracts of corn, 50,000 soybeans, and 65,000 wheat.                   
   # Egypt is tendering for wheat.  The top-importer will announce the winners of the bid later today.  The tender will give U.S. traders a look at where they stand relative to export competitors like Argentina and Russia.   
   # Analysts at Strategie Grains lowered its forecast for the next European wheat crop and also cut this year’s carryout by a considerable 1.6 million metric tons.  
   # Washington DC is at the center of a severe storm that is expected to develop into this weekend.  The Midwest could collect some light precipitation early next week before temperatures start to slowly climb toward the above-average levels currently forecasted.    
   # Weather is improving for wheat growers across Europe and the Black Sea region.  Dry weather returns for much of Brazil this week in a forecast that will be closely monitored by the trade.
   # Equity traders will focus on comments from the ECB and will comb through financial reports from a host of small and mid-size banks.  Also reporting earnings are Starbucks, Southwest Airlines, Schlumberger, and Union Pacific.  Stocks will also continue to track the oil market, which will take some guidance from this morning’s weekly stocks report.       

***** Cattle look to continue lower at the start as hog futures find pressure from technical sellers.  ***** 

   # Cattle futures are still working lower in a move to fill the down gap left open on December 21st.  Expectations for the cash market are uncertain as traders mostly wait to take a look at Friday’s Cattle on Feed report.  
   # Good gains in the cash and wholesale market lend the front of the hog futures curve some support.  Expectations are for the cash market to do some of the work in catching up with futures as market-ready numbers start to decline into winter’s end.