AgriVisor Morning MarketWatch

Thursday, May 12, 2016
***** Corn up 4 cents ahead of the break; soybeans up 8 to 10; Chi wheat up 3. ​*****

   # Grains trade higher in front of the weekly export sales report.  Analysts look for 2015/16 corn sales at 1 million metric tons and soybean sales of 350-400,000 tons for both old and new-crop tallies.  
   # Brazil’s president has lost her impeachment vote and will face suspension while she is tried for budget improprieties.  The Brazilian real is lower against the dollar this morning.
   # Quality is now the major concern for Argentine soybean growers after flooding in April reduced production potential by up to 10 percent and caused damage to another third of the crop.
   # Argentina’s Rosario Grains Exchange says the country will bring in a 55 million metric ton soybean crop.  Tuesday’s USDA report pegged it at 56.5 million metric tons.    
   # Fund traders for now look content to still hold a net-short wheat bet.  The world remains awash in wheat and the U.S., as residual supplier to the world, continues to have trouble competing for trade business.  It doesn’t help matters that USDA’s first 2016/17 U.S. carryout estimate came in over 1 billion bushels.
   # Storms move through the eastern Midwest today.  Some remnants of the system could cause showers to pop up in parts of Illinois.  Cooler weather comes Friday but the 8-14 day outlook still includes warmer than average temperatures.  
   # Soybean futures are working up against report day highs, which include $10.91 1/2 for the July contract.  Soybean futures still register as overbought by many short-run technical measures, including the relative strength index.  July corn also still trades within Tuesday’s range and has resistance from the 20- and 200-day moving averages just overhead.
   # Stock futures are up overnight.  Further energy gains help out, as does a rebound for the retail sector.  An Initial Jobless Claims report will give some guidance at 7:30 central.  Economists expect to see those claims total 265,000 for the week.             

***** Cattle look to open with pressure from technical sellers; hogs may start on the defensive if expected profit-taking ensues. ​*****

   # It is a technical trade for cattle futures as we wait to see how the cash market develops.  A gap for June live futures at $122.25-$120.95 is being eyed closely.  The contract made a bearish outside reversal on Wednesday to settle under its 50- and 100-day moving averages.         
   # There is less optimism to be had by the hog bulls now that the spring season isn’t shaping up as expected.  Slaughters are again keeping pace with the previous week’s numbers and run above last year.  Weights look to be only just now starting to come down.  Pork has surprising competition from beef.