Agrivisor Afternoon Marketwatch

Monday, February 22, 2016
***** Grains ended mixed, with corn 2-3 higher, soybeans 2 to 4 higher, and Chicago wheat 2-3 lower. ***** 

   # Most of the small gains/stability to start the week came from short covering.  Diminishing anxiety about the Chinese economy played a part in the picture.  Crude oil prices firmed again with continued hopes oil producers may make some progress at reigning in competitive pressures, leading at least to a more stable energy sector.
   # The weekly export inspections numbers for soybeans and corn, 56.3 mln. bu. and 35.4 mln. respectively, added a little to the positive early mix.  The 9.0 mln. bu. number for wheat put that market on the defensive early.   There was a 100,000 ton corn sale to Columbia reported today.
   # All the grains, but in particular the row crops, experienced scattered producer selling, capping buying interest much of the day.      
   # The trade remains a little wary of the short position held by the hedge funds, levels that grew even larger on the last CFTC report.  The aggregate futures/options position on the primary ag contracts is at a new record high, with many of the recent positions now “under water.”
   # The trade is looking ahead to news from Thursday/Friday’s USDA Outlook Forum.  If they follow their usual pattern acreage numbers will be released Thursday, with individual commodity s/ds on Friday morning.
   # In the forex market, the biggest news was the surprising suggestion from a key British official that they should leave the EU.  The B Pound plummeted on the news, lifting the Dollar sharply higher.  But it was of little consequence to the grain trade because of the narrow focus.
   # Stronger energy markets had an impact across a number of investment sectors, including the equity market.
***** Live cattle ended $0.65-$0.47 higher, feeders $0.05 lower to $0.62 higher; hog futures $0.10 to $0.72 higher. ***** 

   # Wholesale prices beef prices firmed Monday on the heels of the COF report.  That, and short bought packers, managed to lift cash cattle prices slightly, but packer margins are still a little negative, capping live market strength.            
   # Pork prices edged upward, but the moderately abundant supply of hogs still weighed on the live market.  And with futures at a premium to cash prices, upside energy was lacking in futures.