AgriVisor Morning MarketWatch

Wednesday, May 11, 2016
***** Corn and wheat fractionally changed ahead of the break; soybeans up a penny. *****

   # Some follow-through soy buying was featured overnight.  Soybean futures were up testing Tuesday’s highs while corn traded under resistance from its 200-day moving average.  Slight oil gains and a weak dollar helped buoy the commodity space.  
   # Report day is behind us but won’t quickly be forgotten.  U.S. old-crop corn and soybean carryout estimates were cut while new-crop endings stocks came in below expectations, especially so for soybeans.  USDA analysts used aggressive demand forecasts in their first set of 2016/17 projections.  
   # Fund traders were estimated to have bought nearly 20,000 contracts of corn and 30,000 soybeans on Tuesday to bring their respective net-long positions up to approximately 75,000 and 200,000 contracts.
   # Soybean futures margins increased after yesterday’s rally.  Hedgers will have to put up an extra $300 to make initial and maintenance margins of $2,300 per 5,000 bushel contract.  
   # More dry weather for Brazil lends itself as confirmation that the country’s rainy season has likely ended early.  Expected yield loss for Brazil’s second corn crop has analysts cutting total production by 5-10 percent from earlier estimates.
   # The U.S. 6-10 day weather map leans cool and wet.  Higher chances for above-normal precipitation stick around in the 8-10 day forecast, but temperatures warm up.  
   # A weekly inventory report will give oil traders some guidance today.  Analysts are looking for a small build in U.S. crude stocks to bring them up to a new record high.
   # Important on the economic calendar through the rest of the week are an Initial Jobless Claims report on Thursday and Producer Price Index, Business Inventories, and Retail Sales reports on Friday.  Brazilian lawmakers vote tonight on whether or not their president will face an impeachment trial.        

***** Cattle look to open steady/firmer as hogs inch higher.​ *****

   # Cattle futures faced a little technical push back following last week’s sharp run to the upside.  Slaughters are running even with last week so far.  Packers aren’t showing a bid in the cash market yet.     
   # Some slight optimism has developed over cash and wholesale potential to allow hog futures to a chance to rebound.  The outlook for demand has been recently put into question because of likely heavy interest in beef to start the summer grilling season.  Further material gains will not be made before production shows it will begin heading lower.