AgriVisor Morning MarketWatch

Thursday, April 07, 2016
***** Corn up a penny; soybeans up a penny; Chicago wheat down 2 ½ pennies.​ *****

   # Corn futures trade higher in a somewhat active overnight session.  The market has closed higher in each of four sessions since the 15-cent loss incurred on report day.  The May contract now approaches a technical test of its 10-day moving average.     
   # Fund traders have done some light short-covering on corn, but they still hold a net-short that well exceeds 150,000 contracts.  The large speculators have liquidated only a small portion of their bullish soybean bet and continue to work with a huge net-long on soyoil futures.  
   # Wheat futures remain on the defensive after new sellers entered the mix Wednesday to bet on improving prospects for the U.S. winter crop.  Yesterday’s preliminary open interest report tallied 14,336 new soft red wheat contracts.
   # The weekly export sales report featured moderately strong corn and soybean numbers.  New bookings were 37.2 million bushels for corn and up near the top-end of expectations.  Soybeans were above expectations at 15.5 million.  Wheat disappointed again with a net reduction to the sales tally of 2.1 million bushels.   
   # Brazil’s crop agency raised its forecast for the corn crop to 84.7 million metric tons.  USDA’s estimate for Brazilian corn was 84 mmt in March.  Projections for the soybean crop are 99 mmt from the Brazilian government, 100 mmt from USDA.
   # Today’s fresh run of the National Weather Service’s 8-14 day outlook shifted toward warmer than average temperatures.  The latter half of the two-week forecast remains wet for most of the Midwest.  A dry next couple of days should allow planting to progress in the Delta before rain returns to the region late in the weekend.  
   # Outside markets are rather quiet overnight.  The oil market is taking on a slightly weaker tone after WTI futures gained almost $2 a barrel on Wednesday.  Stock futures point to a lower open for the Dow Jones and S&P 500.  Dollar index futures are a touch firmer despite the yen adding to surprising recent gains.   

***** Cattle and hog futures can start slightly firmer, but upside may be limited by technical selling and spillover weakness from outside markets. *****

   # It was mostly a technical rebound for cattle futures on Wednesday, but better wholesale values also helped stabilize the market.  The fundamentals lean bearish in the near-term with traders expecting that beef production will outstrip consumption over the next couple of months.  
   # Traders are not willing to be big buyers of hog futures until they can start to see pork production come down into the summer season.  Cash market weakness has weighed on the front of the futures curve, but the deferred contracts have held up better.