AgriVisor Morning MarketWatch

Tuesday, April 12, 2016
***** Corn up 1 1/2 to 2 3/4 cents ahead of the break; soybeans higher by 6 to 7; Chicago wheat up 3. *****

   # Wheat futures perform the best of the grains on a percent-change basis, but corn and soybeans are close behind, all with moderate gains overnight.  Oil leads the energy sector higher; metals and soft commodities are also mostly higher to start the day.  
   # The preliminary report had corn open interest rising by nearly 27,000 contracts.  New buyers have been seen entering the soybean market with another 19,000 contracts opened yesterday.  Bearish fund traders were active in the wheat market and helped add 17,500 contracts to open interest.  Trading volume remains higher than average all around.    
   # Some short-covering looks to be featured ahead of the report on the part of funds holding bearish bets on corn and wheat.  April’s World Agricultural Supply and Demand Estimates (WASDE) report will be issued at 11:00 a.m. cst.  
   # Analysts say U.S. corn and soybean carry estimates could go up slightly on today’s report, if at all.  The real uncertainty is over what to expect out of the South American production estimates.  Private estimates have come out on both sides of the government’s last estimates for the Brazilian crops, 84 million metric tons for corn and 100 mmt for soybeans.  
   # There were a few bits of data to digest this morning from Monday’s Crop Progress report.  Corn Planted was estimated at four percent for the nation, on pace with the usual average.  The winter wheat ratings dropped from 59 to 56 percent good or excellent as a result of a turn for crops in Kansas and Oklahoma.  
   # Higher chances for rain in the Midwest come during the latter part of the 8-14 day outlook.  It is the opposite for the Plains, which should enjoy showers this weekend before drying out again.  Temperatures through the rest of April are warmer than average for most of the country.
   # The Australian Bureau of Meteorology issued a La Nina ‘Watch’ today, indicating that the government’s models suggest the likelihood of a La Nina event near 50-50.  La Nina is associated with the threat of too much rain for Australia, the opposite of drought worries that go along with the phenomenon in North America.  
   # The start earnings season is underway and has stock traders on edge because of expectations for a potential 10 percent drop in corporate profitability during the first quarter.       

***** Cattle futures look to start steady to firmer; hogs should enjoy spillover support from outside markets.​ *****

   # Gains in the wholesale market to start off the week should help support the cattle market.  It promises to be a choppy futures trade guided heavily by technical sentiment until market participants can get a look at how the cash trade develops later this week.          
   # Most open interest has moved to the June hogs contract, which faces technical resistance from its 50-day moving average.  Traders are pessimistic about the near-term direction of cash and wholesale markets, but they remain generally bullish over what should be a tighter supply and demand balance this summer.