AgriVisor Afternoon MarketWatch

Thursday, March 31, 2016
***** Corn futures tumble 15; soybeans up 2; Chicago wheat up 8 to 9 1/2. *****

   # Two key crop reports today: Quarterly Grain Stocks and Prospective Plantings.
   # USDA had a surprise in store for the market, estimating 2016 corn sowings at 93.6 million acres.  Some of the highest pre-report guesses had it at 91.  The reasoning is that additional corn acres will come from a return of last year’s prevent plant and also at the expense of soybeans and other minor feed grains.    
   # The corn acres number can come down from here.  USDA pegged it at 89.2 million last year before weather got in the way; the final tally ended up at 88 million.  Talk of wet Delta acres switching to soybeans has already been heard this year.    
   # Soybeans acres dropped to 82.2 million from 82.7 last year.  No surprise there as the number landed near the middle of pre-report predictions.  Illinois soybean acres are projected to climb 200,000.  The biggest gainer is Missouri with an extra 950,000 due to last year’s prevent plant.    
   # Quarterly Grain Stocks estimates held no surprises.  Corn inventories as of March 1 added to 7.8 billion bushels, a number that was fully anticipated.  Soybeans were a hair under the average trade guess at 1.53 billion.  Wheat was 20 million over the trade guess at 1.372 billion and could take a small bit out of the Feed and Residual estimate come the April WASDE.  
   # Corn lows were put in around 12:45 central before futures recovered about four cents by the closing bell.  Soybean futures dived lower in the immediate seconds after the report release but quickly climbed back to unchanged.  They managed a higher settlement despite facing spillover weakness from corn through much of the session.  Wheat futures benefited immediately from a lower-than-expected acres count and held good gains into the close.     
   # New contract lows were made for corn futures.  May corn slipped under important psychological support from $3.50 but found buyers under that mark.  Nearby soybean futures held technical support from the 20-day moving average but now face resistance from this week’s high at $9.17. Chicago futures could not take back all of yesterday’s losses but move back above their 20- and 50-day moving averages.    
   # Traders are still likely to use the next few sessions to digest these reports, but focus should return to weather quickly enough.  A somewhat uneventful Stocks report should make for a similarly quiet April 12 WASDE update.    

***** Live cattle settle $0.57 to $1.35 higher; feeders up the $4.50 limit; hogs down $0.05 to $0.70. *****

   # The cattle market perked up after corn futures started tumbling.  The rest of the fundamentals continued to lean somewhat bearish with additional losses recorded in the wholesale market and pessimism remaining for the cash trade.         
   # More of the same for hogs on Thursday as cash and wholesale prices continues lower.  Traders were taking profits on futures but the curve found some technical support and losses were limited.