AgriVisor Afternoon MarketWatch

Wednesday, May 04, 2016
***** Corn down 2 to 5 cents; soybeans up 3 to 5; Chicago wheat fractionally firmer. *****

   # Soymeal was day’s leader.  End users are stepping in to make purchases and hedge against growing uncertainties involving size and quality of the Argentine bean crop. 
   # Funds were back to being soy buyers today.  They were close to even on corn.  Friday’s CFTC report showed managed money shifting to a net-long on corn for the first time since last fall.    
   # July corn futures head for a test of technical support from their 100-day moving average.  Soybeans will face resistance from the one-year high made early Wednesday before futures fell back into the close.  
   # Ethanol production was down for a second straight week, in keeping with the usual seasonal tendency.  Stocks were also up a considerable 2.6 percent.  Corn grind totaled 95.92 million bushels and fell short of the 98.4 mbu per week needed to meet the current USDA target.
   # Estimates are starting to circulate for next week’s crop report.  The May 10 WASDE will include a first look at the balance sheet for 2016/17 crops.
   # Thursday’s export sales report will garner plenty of attention.  Traders look for new corn sales near 1 million metric tons after a surprising 2.2 mmt total was reported last week.  Something near 250,000 tons should be added to old-crop soybean bookings.  
   # Traders are eager to see the USDA’s estimate for U.S. new-crop wheat production.  Early yield estimates show good potential for the Southern Plains winter crop.  Better yield compared to the previous two seasons should help offset the sizable drop in planted acreage this year.   
   # Crude oil inventories swelled by more than anticipated last week.  The average trader who was looking for a build of 1.3 million barrels was surprised to see an actual stock increase of 2.8 million barrels.  WTI futures held onto slight gains despite the report miss. 
   # The dollar was firmer against most major currencies as traders priced in a higher chance of a Fed rate hike in June.  Weak U.S. economic data – including a disappointing employment number this morning – keeps the trajectory of interest rates low, though.  

***** Live cattle settle $0.57 to $1.07 higher; feeders down $0.57 to up $0.57; hogs down $0.50 to $1.10. *****

   # Cattle futures ended firmer after starting weaker.  Beef prices continue to be a drag on the market, but they’ve gotten low enough that they should start to spark better demand.  June cattle displayed a bullish outside day on the charts.    
   # Hog futures dropped on pressure from softer pork prices.  It didn’t help matters that futures were registering as technically overbought after a five-day run to the upside.