AgriVisor Morning MarketWatch

Wednesday, April 06, 2016
***** Corn down a penny at the break; soybeans down 2 to 2 1/4 cents; Chicago wheat off 5 to 6 1/2. *****

   # Traders expect soybeans to continue losing ground relative to corn on the rationale that the price structure will result in acres switching back from corn to soybeans.  Some unwinding of the inter-commodity spreads is evident by fund traders whom have held a large net-short on corn but have recent turned bullish beans.      
   # The first round of national winter wheat condition ratings was reported yesterday.  The crop was called 59 percent good or excellent versus 47 percent last year.     
   # Yesterday’s Crop Progress report did not include a planting progress estimate for corn.  The cotton crop is 3 percent planted, sorghum 13 percent, and rice 16 percent.  
   # Better-than-anticipated condition ratings helped weigh on wheat futures overnight, as did an adjustment to the forecast that brings more rain into the Southern Plains.   
   # Analysts are upping their estimates for Brazilian corn crop potential.  The latest forecasts are hovering around 87 million metric tons compared to the USDA’s last prediction for an 84 mmt crop.  
   # There is some developing thought that good second-crop corn potential in Brazil could be threatened by dry weather.  A dry couple of weeks have preceded a dry forecast.  The Brazilians worry that they’ve seen a premature end to the rainy season. 
   # U.S. trade data on Tuesday showed that ethanol exports were down by a sharp 20 percent in February.  The report will be followed up by today’s weekly release of the ethanol output and inventory numbers.       
   # Stock traders approach the market with caution ahead of this afternoon’s release of minutes from the last Federal Reserve meeting.  The bulls could be in for a letdown if the comments do not come out as dovish as the central bankers have recently been perceived as being.  

***** Cattle and hog futures look to make a technical rebound with additional help from friendlier-leaning outside markets.​ *****

   # There was some further liquidation of cattle longs on the part of large speculators yesterday.  Traders observed a bearish technical setup and tried to rush for the exits.  Wholesale prices are holding up better at the start of the week, but there is little certainty over what to expect out of the cash market.       
   # Hog futures took a five-day slide after cash priced turned lower last week.  The summer contracts are doing a better job of holding recent gains as there remain bullish expectations for summer supply and demand balances.