AgriVisor Morning MarketWatch

Friday, March 18, 2016
***** Corn and wheat down fractionally ahead of the break; soybean futures up 3 cents. *****

   # Soybeans lead the grains higher overnight, but gains are limited.  There is a technical game being played out as soybeans attempt to hurdle resistance from $9.  Corn is tagging along but faces some pressure from the correction in wheat.   
   # WTI crude futures are back over $40 with the April contract also trading above its 100-day moving average.  U.S. oil production is now showing signs of slowing as part of the industry’s response to lower prices.  Traders also expect to see a new production agreement among major players including Saudi Arabia and Russia.    
   # Traders wait to see fresh acres estimates from the analysts at Informa.  The numbers come before the industry-wide survey that should circulate next week.  Most early calls look for corn acreage to increase by 2-2.5 million acres over last year with soybean area staying about flat.           
   # Thursday marked exactly two week until the March 31 Prospective Plantings and quarterly Grain Stocks reports.  USDA is in the process of tabulating results from the acres surveys sent to farmers in February.  The report could feature acres projections that are markedly different from those issued during the Annual Outlook Forum, when the government estimated a 2 million acre increase to corn and a 200,000 acre reduction for soybeans.        
   # The last report from Australia’s Bureau of Meteorology observed an El Nino in retreat.  Still, remnants of the weather phenomenon’s influence will likely affect world crops through the remainder of the year’s first half.  Edible oils in particular have gained in price recently because of related production cuts in Asia.       
   # Slight concern over dryness continues to develop for hard red wheat growers in the Plains. Kansas and Oklahoma fall 1-2 inches short from normal rainfall totals over the past 30 day. The new 90-day forecast from the National Weather Service indicates that some relief could be on the way.             
   # Wheat export data continued to disappoint this week.  Monday’s inspections declined along with new sales on Thursday.  Still, exporters are on track to meet the USDA target for 2015/16 with about 9 million bushels needed per week to get to the 775 million bushel goal.           
   # Corn sales made to several of U.S. exporters’ major customers are down on the year.  Sales to Japan are notably lower on the year, as are sales to South Korea, which are off by more than 62 percent from the previous year.  Mexico and Columbia are currently on pace to be bigger buyers this year than they were last.      

***** Cattle and hog futures look to open higher on technical buying before traders look to cash and wholesale markets for better guidance. *****

   # Cattle futures have worked higher this week on bullish action in the cash and wholesale markets, but gains were somewhat limited by technical resistance.  Next up to provide resistance for fed cattle futures is the six-month high at $144.45 made last October.         
   # Nearby hog futures have lost some momentum in recent weeks as traders anticipate there being a lull in demand before stocking up for Memorial Day begins.  Expectations for tighter supplies and strong consumption remain for the summer outlook and the deferred futures months have reflected that.