AgriVisor Afternoon MarketWatch

Tuesday, March 22, 2016
***** Corn futures settle fractionally firmer; soybeans up 8 1/4 to 8 3/4 cents; Chicago wheat closes higher by a penny.  *****

   # The session started with a risk-off trade dominating in most major markets.  Terror attacks in Brussels sent investors flocking to safe-haven assets like gold and U.S. treasuries.  Strength in such assets faded throughout the day and U.S. stocks were able to recover early-morning losses.  
   # The broad commodity space is enjoying a move to the upside this month.  WTI crude futures are up more than $7 per barrel since March 1st.  Iron ore and other industrial metals like copper have charged higher as confidence over emerging market economies improves.  Corn, soybeans, and wheat all maintain gains on the month.  Soft commodities like sugar, coffee, and cocoa are all higher as growers around the world face various weather threats.  
   # A lower dollar has been a catalyst for recent commodity market strength.  The Federal Reserve continues to take a dovish stance on interest rate guidance, which has weighed on the dollar’s value against major currencies like the yen and euro.  Weakness against the Brazilian real has also been a noted driver for some commodities.    
   # Soybean bulls have technical momentum on their side after closing higher in 12 of 14 sessions in March.  Nearby futures will have a test of resistance coming up at $9.19 3/4.  May corn futures are struggling to gain further traction to the upside as the contract approaches its 100-day moving average.   
   # The new-crop November soybean contract has gained 48 cents since March 1st while December corn has tacked on 11 3/4.  Relative strength for soybeans may have been a partial reflection of traders’ expectations for more corn acres to come at the expense of soybean area.  The Prospective Plantings report will provide the government’s latest 2016 acres estimates next Thursday.   
   # More than 60 percent of the nation’s winter wheat crop was at risk for damage due to cold temperatures last weekend.  Temperatures are expected to warm up through the week before turning back lower this weekend.  The beginning stages are drought are starting to develop in parts of Kansas and Oklahoma, the 6-10 outlook features better chances for rain in those areas.
   # Cold temperatures this week could threaten winter wheat ratings that have been running well above last year.  The Kansas crop is rated 57 percent good or excellent, up 16 percent over last year.  Texas is rated 47 percent G/E and Oklahoma wheat is 63 percent G/E.  

***** Live cattle settle $1.32 to $1.92 lower and feeders drop $1.05 to $1.12; hog futures gain $0.80 to $1.00. ***** 

   # Cattle futures continued lower as traders expect to see cash deals done at weaker levels when the market develops later in the week.  April live futures finished in the bottom half of the day’s range but held above the March low at $134.80   
   # Hog futures held onto technical support and buying interest eventually outmatched sellers reacting to lower cash prices.  Volume was light as traders wanted to wait for a look at the afternoon’s Cold Storage report.  Total pork stocks were up slightly in February, but not by near as much as they jumped from January to February in 2015.