AgriVisor Afternoon MarketWatch

Tuesday, March 01, 2016
***** Corn down 1 1/4 to 2 cents; soybeans off 2 1/4 to 3; Chicago wheat drops 7 1/2 to 8; *****

   # The expiring March corn contract settled with a fractional gain, but the rest of the curve notched in a sixth straight lower close.  Losses for soybean futures added to what was a drop of 30 cents in February.   
   # Funds were seen to be active sellers of the grains today.  The large speculators were adding to a net corn short that now exceeds 150,000 contracts.  They were also shorting soybeans after having done some short-covering during the last reporting week.  
   # The bulls managed to put up some defense against sellers working to pull corn and soybeans down to new lows.  No corn contracts were sold under $3.50.  Nearby soybeans dipped below $8.50 briefly but did not test old contract lows.  Recent technical action has been squarely bearish, but contracts are now approaching short-run oversold territory.  
   # Wheat was the weak link of the grains, falling to new contract lows in Chicago.  While U.S. wheat acreage has dropped considerably, expectations are for yields to improve over the below-trend crops harvested in the last two years.  Global wheat inventories remain large with the stocks-to-use ratio comfortably above 30 percent.    
   # USDA projected last week that U.S. exporters would be supplying less corn and corn products to China in 2016.  Talk of China trying to move some state-owned corn into the domestic market helped weigh on prices today.      
   # Analysts are back to discussing the potential of a 100 million metric ton soybean crop in Brazil.  With the country’s soybean harvest now more than a third done, yields are coming in better than expected.         
   # Stocks put together a strong rally, aided by more stimulus in China and an overall improving outlook for emerging market economies.  Strong data on U.S. manufacturing helped.  A related Purchasing Managers Index came in at 49.5 versus expectations of 48.6.     

***** Live cattle finish $0.12 to $0.30 higher as feeders drop $0.85 to $1.42; lean hog futures gain $0.10 to $0.42.​ *****

   # It was a two-sided trade for live cattle futures with technical buyers eventually able lead the curve to a higher close.  Traders have some uncertainty over the near-term fundamentals without having much guidance on what to expect out of this week’s cash trade.  Boxed beef prices were mostly steady as of midday.                      
   # The board’s premium over the cash keep hog futures on the defensive.  But, the charts still lean bullish and the April contract was able to keep support from its 20-day moving average.