AgriVisor Morning MarketWatch

Monday, March 14, 2016
***** Corn up 2 cents ahead of the break; soybean futures down 2; Chicago wheat fractionally firmer. ***** 

   # Grains trade steady to higher overnight, supported by some short-run technical momentum and by friendly action in outside markets.  
   # That corn and soybeans are headed in opposite directions this morning comes as no surprise after Friday’s CFTC report showed fund traders to have added considerable length to their bearish corn bet while covering a good portion of the soybean net-short.  As of last Tuesday, managed money was net-short corn by 229,000 contracts while short beans by 43,000.      
   # Traders ended up taking a somewhat-friendly view of last week’s WASDE report if only because it wasn’t decidedly bearish, but the numbers won’t hold much weight into the new week.  Quickly approaching is the March 31 Prospective Plantings and quarterly Grain Stocks report.         
   # Sunday’s run of the National Weather Service models leans cooler during the 6-10 day range.  The Delta states should start to dry out over the next week before higher chances of precipitation return at the latter end of the 8-14 outlook.  
   # Slight concern over dryness is developing for hard red wheat growers in the Plains. Kansas and Oklahoma fall 1-2 inches short from normal rainfall totals over the past 30 day.           
   # El Nino has not been unfriendly to South American crops as it can sometimes be, but the weather phenomenon continues to be a headache for growers in India and Southeast Asia. USDA recently cut back on its forecast for Indian wheat production and palm crop troubles have been well documented for Malaysia and Indonesia.         
   # The monthly NOPA crush report will be issued on Tuesday.  January soybean crush was a somewhat-disappointing 150.5 million bushels.  Stiff competition provided by Argentine exporters has been one reason for a lagging U.S. crush pace, something the USDA recognized last week when the government analysts cut the 2015/16 crush target by 10 million bushels. 
   # Corn futures in China were steady to firmer to start the week.  Prices have been declining as traders expect the country to become more aggressive in efforts to free up inventory from state-owned stockpiles.       
   # Oil prices fall back nearly $1 per barrel in both WTI and Brent markets.  Iran has announced its intention to increase output by an additional 4 million barrels per day.  Still, more analysts are taking the view that a market bottom is in place.         

***** Cattle and hog futures look to start steady as gains become limited by technical resistance. ***** 

   # Cattle futures moved higher at the end of last week as traders priced in better cash deals.  Dressed sales were recorded at $220, or $7 higher than the previous week’s market.  Slaughters are running just a hair behind last year’s pace to help sentiment, but the burden of proof for bulls switches over to the demand side as we approach the summer season.     
   # Wholesale pork prices remain firm relative to last year but an inability to sustain gains has the potential to stifle momentum in the futures market.  Technical action remains bullish but the board is starting to register as overbought in the short-run.