AgriVisor Morning Marketwatch

Monday, May 02, 2016
***** Grains are slightly lower to start the day; soybeans 2-3 lower, corn 1 lower, and wheat 1-4 lower. *****

   # Some countries are closed for May Day holidays today, which may influence, subdue activity in a number of markets today.
   # Last week’s weak Dollar was part of the influence for the stability, strength in the commodity sector, grains included.  It remained soft in  the overnight trade.  There is growing talk in investment circles that the bigger trend for commodity prices may be turning up. 
   # The trade will be looking ahead to this afternoon’s crop progress report today to gauge how much last week’s weather impeded planting.  The early talk is corn will be 45% planted, with soybeans at 10%.  There will continue to be some focus on the wheat ratings, especially given some evidence of frost damage in parts of the S. Plains.  Recent rains have improved moisture, but that has been mostly built into prices. 
   # The new 6-10 and 8-14 day forecasts point to warmer weather returning to the Midwest.  The western part of the Corn Belt, the Plains, and the Midsouth have a bias to wetness, with central areas having more normal moisture, with areas east tending to dryness. 
   # S. American weather and crops still remain the biggest variables in the grain trade. Argentine soy losses seem to be coalescing around 4-6 mmt., with some higher.  Harvest is being closely watched for quality insight; it is now 24% done.  Corn harvest is about the same. A key S. American analyst over the weekend suggested Brazil’s 2nd crop corn could have already lost 5-10 mmt. productive potential, nearly 10-20% off earlier expectations.
   # It was mostly dry over the weekend in the northern corn areas of Brazil.  That will persist through the week.  Next weekend there could be some light scattered showers, but overall, rain chances don’t look promising.  For Argentina, Uruguay, and southern Brazil, the pattern looks drier, which will help harvest and start to improve transportation.
   # Monday’s USDA March soybean crush is expected to show a 165.5 mln. bu. crush. 
   # Redeliveries against May futures remain big for soyoil, wheat, KC wheat, while modest for soybeans.  Deliveries against corn and soymeal have still not occurred.
   # Friday’s CFTC report showed funds turned slightly long on corn last week.  They expanded their long soybean position, while trimming their short wheat position.

***** Cattle should start steady/weak; lean hogs steady/firm. *****
   # Wholesale beef ended last week lower; pork prices were slightly higher.  
   # Cash cattle prices continue to carry a big premium to futures.  There was a light cash trade Friday at $123-$124, but along with the weak beef market, the cash trade could remain weak, although it will be middle/late week before there’s much trade.  June becomes the lead contract today, and it’s below last December’s low on the nearby chart.
   # Hog slaughter finally declined last week, at least hinting the seasonal decline in supply has started.  Pork continues to edge higher and packer margins are good, both remaining pluses for the cash market and futures.