Agrivisor Afternoon Marketwatch

Tuesday, February 23, 2016
***** Grains ended lower, with corn 5-6 lower, soybeans 10-12 lower, and Chicago wheat 8-10 lower. ***** 

   # Today’s weakness in crude oil and related slippage in the equity markets put grains on weak footing to start the day.  Market specific news had a slightly negative twist undermining any interest in buying weakness
   # Reports out of S. America continue to point to a good crop, although we hear mixed ideas on yields in some places.  A key S. American analysts raised his expectations slightly, but he had been a little under the general consensus. Soybean harvest is said to be starting in the southern most Brazilian state of Rio Grande do Sul. 
   # Funds were said to be the bigger sellers, a move emboldened by the inability to get over minor resistance points to start the week.  They already hold a large position in grains, with some measures suggesting their positions in ag markets in general are the largest they’ve ever been. 
   # Weather played a part in the mix.  Some forecasts include showers in the forecast for the Southern Plains, removing what little concern that had built over the last week about the recent drying trend.  For the row crops, generally good weather, both late season and for harvest is mostly dominating S. America.  Some forecasters are also looking at the evolution of the Pacific Ocean weather, with some now thinking La Nina may be slow to develop, moderating drought risk.
   # The trade is looking ahead to news from Thursday/Friday’s USDA Outlook Forum.  A survey indicated analysts look for the acreage forecasts to be 89.6 mln. corn, up 1.6, 83.3 mln. soybeans, up 600,000 acres, and 52.4 mln. wheat, down 2.2 mln. 
   # The Dollar mostly held gains today, with forex traders still sorting out the possibility and uncertainty surrounding Britain leaving the EU.  Equity markets lost their luster too, with China still an uncertain drag, while global growth prospects continue to look somewhat dim.

***** Live cattle ended $0.52-$0.95 higher, feeders $1.85 to $1.97 higher; hog futures $0.70 to $0.05 higher. ***** 

   # Strength in cattle were guided by strength in the wholesale market, with traders talking up potential for better demand this spring.  Cash cattle were steady in a light trade again Tuesday.            
   # Hog futures were firmer, but less robust with wholesale prices mostly near steady.  Cash hog prices were firmer, but there’s uncertainty that can persist given the relatively generous supply packers have to choose from.