AgriVisor Morning MarketWatch

Thursday, December 29, 2016
***** Corn futures up 1 3/4 to 2 1/4 cents ahead of the break; soybeans up 5 to 6 1/2; Chi wheat higher by 2 to 2 3/4. *****

   # A small step back for the dollar helps support a rebound for the grains overnight.  Fresh fundamental news is limited, so ag futures take extra guidance from outside markets and technicals.  
   # March corn futures have yet to find any buyers above their 100-day moving average, which hovers just above the current trade.  Even with some sharp daily moves, corn futures have traded just a 15 cent range over the past two months.  A break from Tuesday’s $3.46 1/4 - $3.46 CH17 range would be telling for near-term direction.  
   # Soybean sellers have not yet shown any material follow-through on moves that push nearby futures below $10.  10- and 20-day moving averages for the SF17 are falling to indicate a weaker short-term bias, but the contract is working to cross back above a rising 50-day. 
   # Bloomberg reports this morning on its commodity index heading for what will be the first positive year since 2010.  Improving prospects for the global economy have helped to support industrial metals and energy products.   
   # The 7-day forecast is mostly dry for Argentina, but a break from heavy rains will be welcome throughout most of the major growing regions.  Conditions are favorable in the top-producing state of Mato Grosso, Brazil.  Farmers in the northeastern growing regions of Brazil have some slight worries over dry weather.  
   # Cash corn prices in central Illinois have improved a touch this week.  USDA’s Illinois Cash Grain Prices report listed corn basis at 16 cents under March futures. Soybean basis was 20 1/2 cents under January.  The Interior Iowa report had corn and soybean basis levels for that region at 39 and 71 cents under, respectively  
   # The usual Thursday export sales report will be delayed to Friday due to the holiday.  Daily sales activity has been quiet this week.  China has slowed buying as crush margins tighten and Brazilian beans start to head to the trade market.  

***** Cattle futures resume the up-move after reaching fresh 6-month high yesterday; hogs break up out of corrective downtrend to keep short-term trend positive. ***** 

   # Activity on the Fed Cattle Exchange confirmed expectations of a firm cash market for this week.  Wholesale beef prices remain generally robust to help support the market.  February live cattle futures are up $19.57/cwt from their October 13 low.      
   # February hogs have jumped more than 35 percent since bottoming out in October.  Strong fall packer margins incentivized an aggressive pace of marketings and demand generally kept up.  Futures spreads are currently being adjusted to reflect the back-end of the supply pipeline likely staying filled a little longer than anticipated.