AgriVisor Morning MarketWatch

Monday, February 29, 2016
***** Corn up 1 to 2 1/4 cents ahead of the break; soybeans lower by 1 to 2; Chicago wheat up 3 to 5.​ *****

   # Corn and soybeans make slight gains overnight as soybeans take on a weaker bias.  On this extra leap day in February, first notice day for March grains and month-end positioning will help guide the trade.          
   # Last week’s estimates from the Annual Outlook Forum leave traders with the same view of grain markets, that demand will struggle to keep up with the large build of inventories.  Traders now move forward wondering whether or not the related supply-side bearishness is already well priced into the market.         
   # Corn benefits from short-covering support to start the week after the CFTC report showed fund traders to have maintained a large bearish bet on the grain. Nearly half of the soybean short was covered during the last reporting week, but the short sellers resumed their campaign on Wednesday, Thursday, Friday of last week.                      
   # Forecasts from the National Weather Service have shifted considerably warmer.  Both the 6-10 and 8-14 day outlooks call for above normal temperatures for most of the country.  The early part of the outlook is wetter west and drier east with chances for precipitation increasing late in the next two week. 
   # Conditions are shaping up favorably for the early development of Brazil’s second corn crop.  Late-stage corn and soybeans are being treated well by weather in Argentina.  Black Sea wheat is waking up as a result of warm temperatures in the region.  There is also some concern in Europe that wheat is breaking dormancy and could be left open to threat of winterkill.   
   # Global equity markets were struggling to gain footing at the start of the week, but losses were moderate.  Traders are pricing in a decision from Chinese policymakers to cut the amount of cash needed kept in reserves by banks.           

***** Cattle futures look to open with some strength but profit-taking may limit upside; hogs likely to head higher for a test of technical resistance.  ***** 

   # Cattle futures start the week with a test of resistance from the April contract’s $138.95 high.  Cash markets did not develop as fully as anticipated last week, so there will be some related uncertainty for traders.       
   # Hog slaughters inched lower last week and allowed production to dip three percent under last year’s pace.  Optimism over spring demand still helps to combine with supply-side bullishness to help drive prices higher.