AgriVisor Morning MarketWatch

Monday, February 22, 2016
***** Corn up 2 1/4 to 2 3/4 ahead of the morning break; soybeans up 5 to 6; Chicago wheat higher by 1 1/2.​ *****  

   # Broad commodity strength is seen overnight with the sector enjoying spillover support from higher oil and equities.  The dollar index is higher on relative weakness for the British pound.   
   # A warm weekend for the Midwest may be followed by a winter storm.  Chances for snow jump on Tuesday and Wednesday with expectations for heavier accumulation in the eastern half of the region.  
   # Storms are expected to pop up throughout Brazil this week, possibly disrupting some harvest efforts.  Brazil will also remain a topic of conversation this week as the queue of boats waiting to load grain exports becomes longer.                      
   # Funds are back to having a record net-short held on agricultural commodities.  Data from the CFTC showed traders to be more bearish on corn, soybeans, and wheat than had been anticipated.  Last week’s small gains and a good start to the new week are likely a product of some short covering.      
   # Grain futures are working to keep various points of technical support.  March corn is moving higher from its 20-day moving average this morning, but has another nickel to go before the contract can test resistance from the recent $3.73 3/4 high. Soybeans are close to having a test of important resistance from $8.90.      
   # Palm oil prices are a touch weaker at the start of the new week despite a report out of Malaysia showing exports up on the month.  Palm production cuts related to El Nino still provide support to the edible oil market and have allowed soyoil to prop up the U.S. soy complex.  
   # U.S. stock index futures are higher with support from stronger international markets.  Higher crude oil helps all markets.  Bonds and currencies are active as traders price in an increasing chance that the U.K. will leave the European Union.      

***** Livestock futures look to open steady/firmer as the sector enjoys spillover support from outside markets.  *****

   # Friday’s Cattle on Feed didn’t give the market much guidance as numbers came fully anticipated.  Most important for futures market direction will be the development of the cash trade, which was mostly quiet last week.         
   # Hog futures lost some steam after cash and wholesale markets began to retreat late last week.  April hogs face a test of technical support from the February 11 low of $67.90.