AgriVisor Afternoon MarketWatch

Wednesday, April 27, 2016
***** Corn settles lower by 1 1/2 to 4 1/2; July soybeans up 1 1/4, November down 5 1/2; Chicago wheat down 3 3/4 to 5 1/2. *****

   # Corn and soybeans faced technical pressure today.  July corn was resisted by its 200-day moving average while July soybeans were turned away from Monday’s high.  
   # Fund traders have been covering corn shorts, but they haven’t yet shifted to being net-long on the grain.  Managed money is still holding a net-short of around 40,000 contracts.  Their soybean bet is net-long by about 125,000 contracts.  
   # Soybeans faced some pressure on ideas that U.S. products would face increased trade competition after achieving recent gains.  The negativity was largely offset by a surprisingly strong daily soybean sale of 350,000 metric tons made to an unknown buyer.    
   # Traders are eager to see tomorrow’s weekly export report.  New 2015/16 corn sales should top 1 million metric tons.  The trade guesses have soybeans near 500,000 tons and wheat around 125,000.  Forward commitments for the new-crop are also starting to garner attention.
   # Changing export expectations had traders actively bull spreading corn and soybeans.  Whereas the soybean futures curve featured a carry in the spreads a month ago, the July contract now trades at a 25 cent premium to the November.          
   # Ethanol production was down on the down on the week, dipping into the end of April per its usual seasonal tendency.  Stocks were 1.9 percent lower on the week.  Lower output kept corn grind down at 97.3 million bushels.  Corn use now needs to average 98.4 bushels per week to meet the USDA’s current marketing year target.
   # At 2 million barrels, U.S. crude inventories built by slightly more than anticipated last week.  Oil imports continue to run high.  Futures dipped following the report but recovered quickly.  
   # Metal and mining stocks had another good day, but the major equity indexes were pressured by a large price drop in shares of Apple.  The giant tech company reported disappointing quarterly earnings.
   # The Federal Open Market Committee announced it would leave interest rates unchanged this month.  One voter wanted a rate hike.  The rhetoric seemed to indicate that there was less worry about the U.S. labor market but still concern over low inflation.  

***** Live cattle finish $0.55 to $0.95 lower with feeders off $0.12 to $0.75; hogs rally $1.12 to $1.77. *****

   # Cattle turned lower on weakness in the wholesale market.  The midday cutout report had choice beef down $2.68 with select off $2.71.  Cash markets are expected to trade lower again this week; deals on Friday registered in at $125-$127 live.  
   # Hog futures responded after pork prices moved higher for a second day.  Buyers look able to work through what has been a period of high slaughters and heavy weights.  Today’s close over the major moving averages will help the futures bulls.