Markets Change Direction After Holiday

Published on: 11:56AM Feb 16, 2016

Good Morning! Paul Georgy with the early morning commentary for February 16, 2016 at 5:00 am.

Grain markets are higher while outside markets reverse recent slide. The US Dollar, crude oil and stock indices are all higher providing investor risk on attitude.

Weather conditions in South America continue to be positive for crops as analysts raise total production estimates. Forecasts over the next few weeks will be watched closely for any changes but time is running out to reduce production in South America.

Ag Rural in Brazil bumped their estimates on production in beans by 1.0 mmt to 99.7 mmt and they are estimating bean harvest at 16% complete versus 14% last year.

The Rosario Exchange in Argentina bumped their crop estimates taking soybeans up 3.5 mmt to 58.5 mmt and raised corn by 400,000 to 24.2 mmt.

The Jan NOPA crush data will be released later today with trade looking for 155.3 million bushel, down 3.7 million bushel from December and oil stocks of 1.540 billion pounds up 59 million pounds vs. December.

Federal Reserve Banks of St Louis and Kansas City say in a quarterly report that loan demand by farmers will surge in 2016. They see increased demand from loan extensions and renewals which could tighten available credit.

Managed money funds were huge net sellers in grains last week. They increase net short corn positions by 43,306 contracts to 102,785 contracts. Funds sold a net 42,275 contracts in soybeans. They were net sellers of 32,360 contracts to make them a record net short in wheat of 81,045.

The current lineup of ships to load soy and corn at Brazilian ports has grown to twice the number seen a year ago as excessive rains delayed loading and the weak currency boost export sales. (Reuters)

Nebraska's ban on packers owning hogs has been lifted by a new law that allows meatpackers to control the hogs from birth to slaughter.

Beef carcass weights were steady at 833 pounds while pork carcass weights are declining, now 2 pounds less than last year.

Livestock markets will start the week taking guidance from outside markets. We will be watching the stock market and crude trade at 9:05.

Technical resistance crosses at Friday’s high which, if broken, could trigger more buying.

Dressed beef values were mixed with choice down .79 and select up .17. The CME Feeder Index is 158.79. Pork cutout values are up .59.

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