AgriVisor Morning MarketWatch

Thursday, February 11, 2016
***** Corn futures steady ahead of the morning break; soybeans up a penny; Chicago wheat higher by 1 1/2 to 2 3/4. ***** 

   # Grains holding steady overnight despite another anxiety trade having developed in outside markets.  Dow and S&P index futures are off nearly two percent after Asian and European markets started Thursday off sharply lower.  U.S. treasuries are serving as a safe-haven trade, as are gold futures, up $40 an ounce this morning.        
   # Grains will look for some guidance from the export sales report this morning, but otherwise will remain starved for fresh news.  Tuesday’s report did little but remind market participants that the world is carrying large grain surpluses.           
   # News is mostly quiet on the weather front.  Temperatures in the U.S. are cold, but cold enough to serve much of a threat to winter wheat crops.  Conditions are much improved for winter wheat in Russia/Ukraine.  Growers in Brazil/Argentina have had to deal with some hot, dry weeks this season, but no severe threat to the countries’ row crops currently exists.     
   # Grains face pressure from a weak set of charts.  Chicago wheat futures have bounced since making fresh lows on Tuesday, but are likely only correcting from oversold territory for now.  March corn lost support from all of its major moving averages as it fell for six straight sessions.        
   # Meal has been the weak link of the soy complex lately, having notched in new contract lows on Wednesday.  Traders are pricing in expectations for lower meal production after the USDA’s cut to the soybean crush target.  U.S. meal exporters are facing increased competition from the Argentines.  
   # Further equity weakness abroad helps drag U.S. stocks lower this morning.  Traders were also discouraged to hear Fed Chair Yellen suggest that interest rates could continue to rise in 2016.  New lows for crude oil do not help matters in the stock market.     

***** Livestock futures face more pressure from outside markets, new pressure from weaker technicals. ***** 

   # There is some growing optimism over cash prices being able to rebound from last week’s unanticipated weakness as bids rise from $132 to $134 with offers holding near $138 live.  
   # Traders are pricing in the Friday expiration of the February hog futures contract by re-evaluating April’s discount to the cash market.