AgriVisor Morning MarketWatch

Thursday, May 05, 2016
***** Corn futures up fractionally at the break; soybeans up 8 1/2 to 10 1/4; Chicago wheat steady to up 1. *****

   # Grains trade light volume overnight.  Grains and most other commodities trade higher overnight with notable strength for oil.  
   # Oil rallies as traders digest a wildfire in Canada and skirmishes in Libya both disrupt production in the respective regions.  
   # Corn sales were a disappointment this week at 769,000 metric tons.  Analysts had expected something north of 1 million tons.  Sales for the 2016/17 book were also poor.  Soybean sales were very strong with 816,000 tons added to the old-crop ledger and 430,000 to the new.  
   # While the pace of planting in the Midwest is ahead of normal, a lack of warmth has been cause for slow growth.  The rest of the week may find the region split between warm weather in the West, cooler in the East.  Weekend rains could provide a disruption for planting efforts.   
   # Day 2 of the Kansas Wheat Tour estimated yield at 48.2 bushels per acre versus 34.4 last year.  Some disease issues were reported, but fields were judged to be in overall good shape. 
   # Traders will be watching for any possible update to the Chinese corn stocks estimate when USDA issues the WASDE report next week.  China’s carryout for 2015/16 was estimated at 109.5 million metric tons in April, which is more than half of the world’s total projected stockpile.  
   # Money managers are approaching the important May 10 report with a net-long corn position.  Funds turned bullish last week after having maintained a net-short since last fall.  The net-long is now somewhere in the order of 50,000 contracts. 
   # July corn futures are trading within a 7 cent gap bounded by the 100-day moving average at the bottom end and the 20-day at the top.  July beans trade not far from resistance served by the one-year high at $10.57 notched in on Tuesday.
   # Brazil still leans dry, Argentina less wet but threatened with frost/freeze events.  Analysts are all over the board with their estimates for South American production, so it is now a waiting game to see what the USDA has to say next week.
   # Stock futures were rallying behind the lead of oil, but now face some pressure from a disappointing jobs report.  Jobless Claims were 274,000 last week compared to estimates of 260,000.       

***** Cattle look to open steady/firmer as hogs may start on the defensive.​ *****

   # Technical buyers should find some interest in cattle after futures marked a bullish outside day on Wednesday. The market finds fundamental support from cheap beef prices that are starting to spur demand.      
   # The opposite of cattle, hogs face some technical selling after futures have run up into overbought territory.  And, the move lower for beef has erased its premium over pork.