AgriVisor Afternoon MarketWatch

Friday, October 21, 2016
***** Corn futures up 1 1/2; soybeans higher by 7 1/2; Chicago wheat down 2 1/2. *****  

   # Corn futures managed surprising gains after sellers failed to follow through on yesterday’s bearish chart reversal. $3.49 1/4 stands as a minor low, as does the December contract’s 10-day moving average.  The 100-day moving average serves resistance with $3.65 3/4 a retracement target.
   # CFTC’s Commitments of Traders report found money managers to be less short on corn than previously thought.  In the reporting week that ran through last Tuesday, funds exited 42,000 shorts while adding 19,000 longs to bring them net-short by 70,000 contracts.  They covered shorts and added longs to the soybean position, too, leaving them net-long 88,000 contracts.
   # The grains are mostly shrugging off a rising dollar.  Our greenback is up sharply against most major currencies this month as traders price in a U.S. economy that is healthier relative to its overseas peers.  An improved domestic economy outlook is leading investors to expect a Fed funds rate hike this December.  
   # A possible December interest rate hike and market risk from an election before that has some investors looking to the commodity space for a hedge against potential volatility for stocks and bonds.  Index funds have been seen taking a bigger interest in the grains lately and, by the nature of their usually-passive investments, are likely to stick around for a while.  
   # Farmers in the Midwest look forward to a dry weekend before what the 6-10 day outlook promises to be a return of wet weather.  Temperatures should gradually warm up over the course of next week.  
   # This week’s rains look to have gone a long way in helping out farmers in South America.  Weather in Brazil and Argentina was also a topic of conversation this week as it relates to the potential influence of La Nina, which some meteorologists now claim has a greater chance of occurring with notable strength and duration.  

***** Live cattle up $1.55 to $2.12; feeders up $0.85 to $1.25; hogs gain $0.75. ***** 

   # The Cattle on Feed report featured a historically-low placements number, one that was 98 percent of the year-ago total and well under the average trade guess of 103.6 percent.  Marketings were 105 percent versus an average estimate of 106.2 percent.  
   # Hogs futures rallied into the weekend and ahead of the afternoon Cold Storage report that showed larger-than-expected pork inventories.  Pork in storage was counted at 642 million pounds versus 656 million last year.