AgriVisor Morning MarketWatch

Friday, February 05, 2016
***** Corn and wheat are steady, trading tight overnight ranges.  Soybeans make moderate gains.  Equity traders start to digest this month’s jobs report as the dollar index is so far directionless. *****
   # This week’s sales report is another piece of evidence to suggest that the USDA is too high on its 2015/16 export target for wheat. Cumulative bookings are nearly 18 percent behind last year’s total while the USDA looks for just at 7 percent drop on the year.         
   # Egypt is tendering for wheat.  The world’s top-importer has made headlines recently after a French cargo was rejected due to ergot fungus contamination.  The tender will give market participants a fresh look at current trade prices.    
   # Palm oil prices have climbed to near two-year highs as stocks decline.  Drought conditions brought on by El Nino have hurt production in Asia. U.S. soyoil prices were enjoying support overnight and outperform the rest of the complex.          
   # Traders will be keen to take a look at the South African supply and demand numbers when the report comes out next week.  The January report saw the country’s corn production estimate fall by a full third from the previous look because of drought effects; however, the import forecast was bumped up only marginally.        
   # It was a mixed jobs report this month with payrolls climbing by less than expected while the unemployment rate actually dropped. Nonfarm payrolls increased by 151,000 in January versus expectations of 185-190,000.  The unemployment rate dropped from 5 to 4.9 percent.  

***** Cattle futures look to open with slight gains as traders price in optimism for today’s cash trade; hogs likely to enjoy follow-through buying but upside may be met with profit-taking. *****

   # Cattle futures are finding support from firm bids starting to materialize in the cash market, which should become more active today.  April futures work to keep chart support from their 100-day moving average.                
   # Cash hogs are holding firm enough to sustain bullishness over the board.  This week’s dollar fall helps renew some optimism over export potential.  The technicals remain positive, if not a touch overbought in the short-run.