AgriVisor Morning MarketWatch

Tuesday, March 22, 2016
***** Corn steady to fractionally firmer at the break; soybeans up 3 1/2; Chicago wheat up 1 1/2. *****

   # Grains trade firmer overnight on some follow-through buying related to slight weather worry and stronger technicals.  Outside markets feature somewhat of a flight-to-quality trade after terror attacks in Brussels.  
   # Soybeans are finding buyers at $9 as the May contract makes a new three-month high and sustains solid technical momentum.  Corn has made good gains in March but lags behind beans.  Nearby futures face resistance from their 100-day moving average. 
   # Funds are seen covering corn shorts, but they are not adding many fresh longs to the mix.  The large speculators still hold a net corn short somewhere north of 175,000 contracts.  Some new longs have added to short-covering efforts to turn the managed money soybean position into a net-long.   
   # Farmers in the Midwest were eyeing an early entry into the fields, but planting may have to wait for drier weather.  The two-week forecast continues to lean wet for most of the region.  Cold temperatures hang around to further threaten winter wheat crops in the Plains this week.   
   # Dry weather in South America is helping harvest progress in Brazil but could end up serving as a slight threat to growing crops in Argentina.  Wheat in Russia/Ukraine will be threatened by cold temperatures returning to region this weekend.  Drought in Asia continues to curb crop production.                 
   # Weather-related production shortfalls in Asia include those suffered by palm growers.  Supply deficiencies helped pull Malaysian palm oil prices to new two-year highs.  Improved demand from places like China also helps support the market.     
   # Grains finished mostly higher on China’s Dalian Exchange Tuesday.  Higher prices help to offset some bearishness related to the country’s efforts to start moving out more of the state-owned grain inventories.                 
   # U.S. stock futures are quietly lower as buyers approach with caution after terror attacks in Brussels Tuesday morning.  Lower oil prices help to pressure equities.  WTI crude futures are a touch overbought after having gained more than 50 percent from early-2016 lows.   

***** Live cattle futures open with a test of technical support as hogs look to bounce after a rough session Monday. *****

   # Weaker expectations for the cash and wholesale markets weigh on cattle futures to start the week.  Traders are also pricing in an adjusted outlook for future supplies after the Cattle on Feed report featured a placements tally that was higher than expected.   
   # Traders are taking profits on hog futures ahead of this week’s reports.  Cold storage numbers will be released today at 2:00 p.m. central and should give market participants a better feeling on meat supplies ahead of the summer.  The quarterly Hogs and Pigs report will be issued when the market is closed on Friday.