AgriVisor Morning MarketWatch

Monday, January 25, 2016
***** Corn futures a penny lower before the break; soybeans down fractionally; Chicago wheat firmer b 2 cents. *****             

   # Corn and soybeans start Monday on the defensive but losses are only nominal. A weaker market tone is spilling over from the energies. Fresh news is very limited for the grains.      
   # It’s a mixed start to the week for global equity markets.  Stocks in China and most of Asia closed higher while European indexes and U.S. futures are lower. Traders will keep an eye on this week’s Federal Reserve meeting.                   
   # Oil trades lower after WTI futures enjoyed a 15 percent rally through last Thursday and Friday. Bearish influences include weak Chinese diesel consumption data and a statement from Saudi Arabia on that country’s continued commitment to oil investments.       
   # The funds were seen covering grain shorts during the last CFTC reporting week.  Through Tuesday, managed money was still net-short by more than 150,000 contracts of corn.  Their bearish soybean bet was cut in half to just more than 25,000 contracts.  Funds remain net-short by 70,000 Chicago wheat contracts.     
   # Most of Brazil was dry over the weekend and will remain so through the first few days of the new week.  Scattered showers will show up again by midweek for nearly all of the major growing regions. While hot, dry weather is a threat to developing soybean crops, wet weather is a concern for fields nearly ready to harvest.  
   # The real is hovering near old lows against the dollar and a weak currency is making for favorable crop prices in Brazil.  Farmers there are seen picking up the pace of soybean sales in the weeks ahead.  
   # March corn futures are still working with technical support from their 50-day moving average.  The contract has closed higher in 6 of 8 sessions since the January 12 crop report.  Nearby soybeans have struggled with chart resistance from the 100-day moving average and start the week off with a test of support from the 50-day.        

***** Hogs to start steady/slightly weaker; cattle futures to begin the week on the defensive.   ***** 

   # Friday’s Cattle on Feed report was bearish relative to expectations.  The Placements figure was about 99 percent of the year-ago total, when something closer to 95 percent was anticipated. A Cold Storage report found beef inventories higher by 16 percent on the year.        
   # Hogs have been choppy with spreads dominating the action, but general direction of the market has been positive.  Cold storage stocks were much higher on the month but a little light than expected.