AgriVisor Morning Marketwatch

Tuesday, April 19, 2016
***** Grains are slightly higher to start the day; soybeans 6-7 higher, corn 2 higher, and wheat 1-2 higher. *****

   # The lack of change in the short term influences, whether they be fundamental, or psychological, continues to give grain prices a lift.
   # On the crop progress report, the USDA reported corn planting was 13% complete; the trade expected 14%.  The winter wheat condition rating jumped 1 point to 57% good/excellent, in line with expectations.  The ratings for various classes of wheat were unchanged, except for the small uptick in the ratings of the soft white wheat grown mostly in the PNW.  Various states in the S. Plains had higher ratings for the hard red crop, but were balanced by  others having slightly lower levels. And spring wheat planting, 27%, was in line with ideas as well as being slightly ahead of normal.
   # Last weekend’s rains across the S. Plains are expected to boost the condition ratings of the hard red crop in weeks ahead, but emerging indications the frost/freezes might have caused more damage than believed are counter balancing expectations somewhat, along with implications of earlier dryness. 
   # Planting will be interrupted temporarily, especially in the western Corn Belt, by the current weather system.  But activity is expected to get back on track after it passes, with conditions looking good through the weekend.  Rain may stall progress early next week.  Longer range outlooks call for moisture chances to be a little above normal through month’s end, especially in the western Corn Belt and Plains.  Temps will stay warm, but will gradually turn to normal/cool.  
   # In S. America, the center/west area of Brazil is expected to stay dry the next 10 days.  There is some rain to the northeast, but it’s not a big crop area.  And in Argentina, the latest forecasts are hinting change could be coming, finally bringing some relief to flood plagued areas.  That will allow harvest to get underway again, but damage to mature crops has already been done.  Early estimates for a reduction in the 2nd corn crop in Brazil range from 3 to 10 mmt.  Most are dismissing the 10 mmt. reduction in the Arg. soy crop, but output could slip slightly.
   # The bigger short term story may surround the speculative environment, with a lot of talk about the recent rise to record open interest in soybeans at the CBOT.  Speculative funds have gotten moderately long as well.  The trade is seeing the shift as a sign the rally may be somewhat vulnerable.  And even though fundamentals are favorable, the interest in funds maintain short wheat positions is moderating. 
   # There may be a broad shift in attitude regarding commodities, with a lot more favorable talk about the bear trend coming to an end. Other commodity currencies have been rising against the Dollar, including the Australian Dollar, Brazilian Real, and the Russian Ruble.  In general, the Dollar is slightly lower again today.

***** Cattle should start steady/lower; lean hogs steady/firm. *****  

   # Wholesale beef is narrowly mixed; pork prices are slightly higher.  
   # Cash cattle prices should trade higher from Monday’s distressed trade, although after the break to start the week, activity may be slim until late week.  Cash hog prices should be steady/$1 higher today.
   # Cattle feedlot showlists are generally no larger than last week.  And, wholesale prices are holding recent gains.  They will curtail feedlot selling interest.  Stalled planting activity may boost hog movement short term, but they should subside as the week draws to a close.