AgriVisor Afternoon MarketWatch

Monday, April 18, 2016
***** Corn closes higher by 2 to 2 1/2; soybeans fractionally changed; Chicago wheat up 12 to 13. ***** 

   # Last week’s report from the CFTC on trader positioning caught many by surprise.  Funds had covered less of their corn shorts and added more wheat shorts than had been anticipated.  Managed money is estimated to have a net-short corn position of around 80,000 contracts, short 90,000 wheat, and long 120,000 soybeans.   
   # It was that large addition of shorts by the funds that allowed the wheat market to put together a surprising rally.  Futures were expected to face pressure to start the week after beneficial rains provided some much-needed drought relief in the Southern Plains.
   # USDA will report on Crop Progress this afternoon.  The winter wheat crop likely deteriorated ahead of the rain enjoyed this weekend.  Guesses for planting progress on corn range from 10 to 14 percent.     
   # Soybean futures made new six-month highs before turning weaker into the close. The 14-period daily Relative Strength Index has soybeans registering overbought at a reading of 72.  Corn futures have settled higher in 11 of 12 sessions since the March 31 reports.  The nearby contract cleared resistance from a December 14 high and trades a nickel short of its 200-day moving average.  
   # Corn posted another solid week’s worth of export inspections.  Shipments were slightly smaller than in the previous week at just over 1 million metric tons.  Soybean inspections were a little soft at 256,822 mt.  Wheat shipments were better than expected.
   # The forecast for Brazil remains dry.  Rain could return to the mix Wednesday and Thursday in the South.  Temperatures continue to run well above normal.  Early estimates look for hot, dry conditions to potentially cut up to 10 million metric tons from the country’s corn production this year.  
   # It is the opposite extreme for Brazil’s southern neighbor.  Argentina is dealing with flooding that serves as a severe threat to standing crops.  Parts of the country may find relief from drier conditions this week.    
   # Earnings season is going better than feared for U.S. corporations, helping to support the stock market.  Large banks look to be weathering the storm of low interest rates and declining trading revenues OK.            

***** Live cattle and feeder cattle futures finish lower by the respective $3 and $4.50 limits; lean hogs gain $0.20 to $0.45. ***​**

   # Cattle futures were down by as much as the daily limit.  Beef production is up recently and has not yet been matched with strong demand.  Traders are not convinced last week’s strong wholesale gains will be sustained.                 
   # Lower production and stronger demand that is partly a result of pork’s wide discount to beef helps support the hog market at the start of the week.  Futures remain technically weak as they head for a test of the 100-day moving average.