AgriVisor Morning MarketWatch

Wednesday, March 16, 2016
***** Corn down 1 3/4 to 2 cents overnight; soybeans down 4 1/2; Chicago wheat down 2. *****

   # A lack of fresh news leans negative for the grains with momentum diminishing as futures approached old highs.  Outside markets provide little influence overnight.    
   # Technical action will guide the trade over through the latter half of the week.  May corn futures move back lower for a test of support at the 50-day moving average.  Nearby soybeans are struggling with resistance from $9.00.            
   # The fund traders have some big capital behind their chart-trading algorithms.  Short-covering helped buoy corn futures on Monday, but managed money was back to being sellers on Tuesday and a net-short of more than 200,000 contracts is still held.  The computers could quickly turn into soybean sellers as futures show trouble clearing $9.                
   # Some damaging wind and hail accompanied thunderstorms that developed over north and north-central Illinois last night.  Snow is expected to return to northern Minnesota and Wisconsin today.  The entire Midwest should warm back up again after this weekend.     
   # Ethanol production numbers will be the lone bit of fundamental data reported today.  Corn used for production should total just more than 100 million bushels.  The corn grind has declined in each of the last two weeks, but it remains well on pace to meet the USDA’s 5.225 billion bushel target.                
   # The wheat market faces some pressure on a report that Argentine wheat would be headed for the U.S. Southeast.  Unfavorable currency terms still leave U.S. exporters facing stiff trade competition from growers abroad.                 
   # Also pressuring wheat is news that the Egyptians will import less this year than previously thought.  The top-importer hasn’t made any friends with their recent rejections of cargos due to phytosanitary issues and the country’s traders are also thought to be having some trouble securing credit. 
   # Outside markets may not be a significant influence overnight, but they have the potential to become one later in the day after traders react to the Federal Reserve meeting statement.  Economists are not expecting a rate hike this time around, but the Fed comments on interest rate direction through the rest of 2016 certainly may cause some excitement in stocks, bonds, and currencies.  The statement is released at 1:00 p.m. central with Chair Yellen speaking shortly after.                 

***** Cattle futures face technical resistance as hogs open with a test of technical support.  *****

   # Two days’ worth of significant gains in the wholesale market lends support to cattle futures as traders become optimistic about cash market potential. Futures gains may be limited in the short-run now that they trade in technically-overbought territory.  Cattle on Feed report will give further guidance at the end of the week.         
   # Hog futures face some pressure from weaker wholesale prices and also from some technical resistance.  Next week’s Cold Storage report will give traders a better idea about how the supply and demand balance should shape up at the start of the summer season.