AgriVisor Morning MarketWatch

Monday, May 09, 2016
***** Grains slightly higher in quiet overnight trade. ​*****

   # Grains trade steady to firmer overnight.  Energies are higher, metals lower.  Fresh news is rather limited coming into the new week.  
   # Traders are positioning themselves for Tuesday’s WASDE report.  The U.S. 2015/16 corn carryout is estimate is expected to rise slightly while the soybean number should fall back by about 20 million bushels.  Cuts will be made to the South American production estimate; there is much disagreement on what to expect as far as the size of those cuts.  
   # Some of the most aggressive estimates have the Argentine soybean crop down 15 percent from USDA’s April estimate.  A considerable portion of the crop that could be harvested is showing severe quality issues.    
   # Fund traders were seen building their new corn long last week.  Hedge funds are thought to be net-long by about 75,000 contracts while they maintain a net-long soybean position of near 175,000 contracts.  
   # Rain is in the forecast for the Midwest this week.  Planting delays are expected.  The 6-10 day outlook leans drier.
   # Rainfall was sporadic throughout the country last week, leaving the trade uncertain as to what to expect out of this afternoon’s planting progress numbers.  Corn should be near within a few points of 60 percent planted with soybeans around 20 percent.  
   # Levels of technical support for July corn: $3.75, $3.58 3/4, $3.47 1/4. Resistance: $3.93 1/2 and $4.02.  Support for July soybeans: $10.08 1/2, $10.00, $9.82.  Resistance: $10.57, $10.60 1/4, $10.86 3/4.
   # Oil is up as traders digest friendly influences of a new Saudi Arabia oil minister, Canadian wildfires, and another drop in the U.S. rig count.  WTI futures trade just short of three-month highs at $46.78.
   # The dollar index is up further after last week ended with a four-day rally.  The euro, yen, and pound have been surprisingly strong in the face of central bank easing in Europe and Japan and the possibility of Britain’s exit from the EU.  Current dollar strength is attributed to both a technical rebound as well as growing chances for a June interest rate hike.         

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

   # Cattle futures are bouncing out of a double bottom formation, moving higher for a test of resistance from their 50- and 100-day moving averages. Packer spending should carry through from last week with strength to help support a more positive fundamental bias for the market.           
   # The hog market is troubled by resilient production levels.  Traders are less optimistic about demand after a cold, wet start to May.  Falling beef prices have also presented the market with more competition.