AgriVisor Morning MarketWatch

Thursday, March 24, 2016
***** Corn down fractionally at the break; soybeans off 2 to 2 3/4 cents; Chicago wheat lower by 1 to 1 1/2.​ *****

   # Grains are trading lower on moderate volume overnight.  A similar storyline carries over from Wednesday with a broad risk-off trade leaning unfriendly for most commodities.    
   # A risk-off trade for commodities is spurred by a stronger dollar.  Index futures are up for a fifth straight day as traders back to thinking U.S. interest rates could rise soon.    
   # More guidance on the interest rate question will be given by Friday’s GDP report.  The 4th quarter growth revision should come in near one percent.  That number will be accompanied by data on corporate earnings for the quarter.       
   # There has been some fading of what was renewed confidence in emerging market economies as of late. Traders are back to keeping an eye on stocks in China, which fell by more than 1.5 percent in Shanghai on Thursday.  Grain bulls worry that sluggish economic growth in China and other emerging markets will lead to sluggish demand for grain exports.          
   # Weak oil hasn’t helped out the commodity space any this week.  The stocks report showed crude inventories building by 9.4 million barrels.  Inventories remain high, but production is turning lower and product demand improving.         
   # Snowfall totals were a little short of expected for the western Midwest last night.  Rains moved into Illinois early Thursday and should stick around until midday.  The Southern Plains were mostly passed over, but better chances for precipitation have developed in the 8-10 outlook.                     
   # The grain bulls will try to defend various levels of technical support today.  May corn futures currently trade with support from their 50-day moving average but have struggled with resistance from a falling 100-day.  $9 is the mark to watch for soybeans.  The charts shaped up bearishly in the near-term after an inside day indicated some possible buyer exhaustion yesterday.        
   # Jobless claims increased by about as much as expected last week, to 265,000.  Durable goods orders dropped by 2.8 percent in February, which is slightly better than the expected 3 percent drop.  Traders will likely wait for Friday’s GDP and corporate earnings data instead of making the assumption that today’s numbers mean anything important for interest rate prospects.     

***** Live cattle futures look to bounce back after five-day slide; hog bulls to work to keep technical support at the open.   *****

   # Cattle futures were pressured under the weight the latest Cattle on Feed report all week.  Stalled-out wholesale prices and the resulting lowered expectations for cash market potential have limited rebound potential.  Futures should find some technical support today.  
   # Hogs still benefit from a friendly outlook for the supply and demand balance this summer.  Pork should attract good early-season buyer interest as it remains competitively price relative to beef.  Negative outside markets influences likely limit gains in the short-run.