AgriVisor Afternoon MarketWatch

Monday, February 08, 2016
***** Corn futures down 3 1/2 to 3 3/4 cents; soybeans a nickel weaker; Chicago wheat off 7 1/4 to 8 1/4. *****
   # Some follow-through pressure from the short side was present on Monday after the grains fell weaker to close out last week.  Futures had bearish technicals working against them and also faced the weight of a sell-off in outside markets.  
   # Momentum faded for the grains after short-covering campaigns from the fund traders came to an end.  The large speculators cut their bearish corn bet by nearly a third in the last reporting week, but still remain net-short by about 60,000 contracts.  They left the week net-short 26,000 soybeans and 49,000 Chicago wheat.
   # The weekly export inspections report was a bit disappointing.  Corn shipments were just 17 million bushels compared with 28 million last year.  Soybeans inspections were 43 million with wheat near 15.    
   # Tomorrow is report day.  Analysts are looking for slight upward adjustments to U.S. corn, soybean, and wheat carryout estimates.  World production estimates, particularly those for South America, will get top-billing.
   # Most analysts see the USDA’s estimate for Brazilian corn production sticking close to the previous 81.5 million metric ton forecast.  Soybean production could come down slightly from January’s 100 mmmt.  The range of estimates runs 98-101 mmt.    
   # Black Sea wheat – that from Russia, Ukraine, and Romania – will likely continue to compete heavily with U.S. supplies in the export market.  Weak currencies held by those countries give Black Sea traders an advantage.  There is still a possibility that Russia could make adjustments to the export tax structure.      
   # Soybean bulls were talking about this week’s forecast for dry weather in Argentina, but some wind was taken out of their sail after good rains fell this weekend.      
   # The major U.S. equity indexes are closing in on two-year lows after a sharp tumble to start the week. Worries about global growth prospects combine with weaker oil and a recent string of disappointing corporate earnings to help weigh on the stock market.   

***** Live cattle down the $3 limit with feeders also locked-limit, down $4.50; hog futures trade $0.67 lower to $0.12 higher. ***** 

   # Cattle futures fell as traders priced in last week’s cash market weakness.  Market participants had expected the cash trade to hold steady or even make slight gains as the week was wrapping up, but deals slipped late Friday.    
   # Hog futures opened with some strength but fell weaker into the mid-morning trade. Traders were taking profit as the sell-off in outside markets triggered some concern.