AgriVisor Morning MarketWatch

Thursday, March 10, 2016
***** Corn down 1 1/2 at the break; soybeans off 3 to 4; Chicago wheat lower by 2 3/4 to 3 1/4. *****

   # Grains trade broadly lower overnight.  Report day deflated some of the recent enthusiasm.  A strong dollar also provides a slight headwind to start the session.    
   # The dollar is rallying against its major currency pairings after the European Central Bank announced an interest rate cut and further quantitative easing measures.  European stocks rose in anticipated of the move and U.S. equity indexes enjoy some spillover strength.   
   # Wednesday’s crop report did little to change market sentiment for the grains.  U.S. corn carryout was unrevised to defy expectations of slight increase, but the number remains high at more than 1.8 billion bushels.  Soybean carryout was adjusted upward by 10 million bushels to 460 mbu as a result of a weaker crush target.   
   # Private analysts still suspect that the 2015/16 ending stocks estimates will move higher.  Some predictions have the corn carryout rising to something just short of 2 billion bushels while it is thought that soybean carryout could top 500 million bushels.   
   # USDA is in the process of collecting and tabulating surveys for the March 31 Prospective Plantings report.  The fresh estimates can deviate substantially from the projections given at the February Outlook Forum, which this year called for 90 million acres of corn and 82.5 million to soybeans.   
   # Dollar index futures are sharply higher, but our currency is losing further ground against the Brazilian real this morning.  Brazil’s currency is up against the dollar by more than 10 percent from its 2016 low.  Continued stabilization of the currencies in the hands of our emerging market competitors would be a friendly development for U.S. export programs.    

***** Cattle look to open mixed as futures continue to consolidate on recent gains; hogs start the session with a test of technical resistance. ***** 

   # It remains wait-and-see for futures traders as the cash market is expected to more fully develop today and tomorrow.  Near-term beef supplies are plentiful enough, but market participants are still working under the assumption that demand will pick up well as we move toward grilling season.        
   # A bullish-leaning fundamental story remains intact for hogs.  On Wednesday’s WASDE report, government analysts revised 2016 pork production down slightly while raising the usage target.  Chart action continues to shape up positively for futures.