AgriVisor Morning MarketWatch

Wednesday, February 24, 2016
***** Corn down 1 1/4 across the curve; soybeans 1 to 1 3/4 weaker; Chicago wheat off by 1 to 2 at the break.​ *****

   # Commodities remain on the defensive as volatility in outside markets picks up.     
   # The charts continue to lean bearish after grain futures lost support from their major moving averages.  The February 12 low of $3.58 1/4 is next up in support of the March corn contract.  Nearby soybeans have a recent low of $8.59 1/2 to be watched closely. 
   # Fund traders are backing their bearish grain bet with a lot of capital, now net-short nearly 150,000 contracts of corn, 50,000 soybeans, and 100,000 wheat.                     
   # Up to an inch of rain fell over parts of the mid-South last night.  More precipitation is on the way today, whether in the form of rain or snow. Central Illinois looks to be the dividing line between rain west and snow east.      
   # A wetter weather outlook is proving a negative for grain prices as the moisture helps to relieve some worry over dry conditions.  Weather also remains generally favorable for crop development and harvest in South America.  
   # Traders await numbers from the Thursday-Friday Annual Outlook Meeting.  The USDA will give us a first look at 2016/17 acreage estimates.  Analysts are still all over the board on their expectations for the corn and bean mix, but an average guess calls for 1.5 million more corn acres and 0.7 million more soybean acres.   
   # Currencies are volatile this morning.  The British pound drops as the market prices in concerns about a potential U.K. exit from the European Union.  The Brazilian real is down after the country’s debt rating was downgraded.  The Chinese yuan moves lower against the dollar as the Japanese yen rises.    
   # Oil prices are heading back lower as traders question whether a recent OPEC production agreement will hold up.  Equities continue to trade hand in hand with oil and thus futures point to a lower start for the major indexes.       

***** Cattle futures look to open mixed as negative outside markets leave some buyers with caution; hogs likely to head lower at the start.  *****

   # Big gains for boxed beef support the live cattle futures curve.  Choice and select cuts were both up more than $2 on Tuesday.  Expectations are for cash markets to show some improvement when they more fully develop later in the week.  
   # Tuesday’s Cold Storage report leaned bearish for hogs.  Pork stocks are up 17 percent on the month and 7 percent on the year.