AgriVisor Afternoon MarketWatch

Tuesday, May 17, 2016
***** Corn futures gain 3 to 3 3/4 cents; soybeans up 12 1/4 to 15 3/4; Chicago wheat higher by 7. *****

   # It was meal, on its way to new one-year highs, that led the soy complex higher on the day.  Nearby soymeal futures have gained 35 percent since the start of April compared to a gain of 18 percent for soybeans over the same period.  Soyoil futures are down since the start of April.  Meal benefits from Argentine production troubles while soyoil is pressured now that El Nino’s exit will allow Asian palm production to recover.  
   # Wet weather is starting to stir some worry for growers facing planting delays in the eastern Midwest.  Indiana, Ohio, and Michigan are each less than half planted on corn.  Those states are 15, 10, and 14 percent planted on soybeans, respectively, compared to five-year averages of 31, 28, and 28 percent. 
   # Some farmers in northern Iowa and Minnesota have worry after the weekend freeze threatened emerged corn.  Farmers throughout the Midwest are concerned over how a lack of growing degree days has influenced the start of the growing season.    
   # Today’s rally was reportedly met by little resistance from producer selling.  Many farmers are well ahead of last year on soybean sales.  Those sales have served as a hedge against their patience on corn.  The thought is that a tremendous amount of sales would be booked at $4.00 cash.
   # Analysts see further cuts to the USDA’s Brazil corn production estimate as likely.  Dry weather and resulting yield loss for the country’s second crop make the current prediction of 81 million metric tons look too high.  Traders are betting that a smaller crop in Brazil will help keep demand for U.S. exports strong.  
   # U.S. stocks did not benefit much from higher energy and metal prices like shares in Europe and Asia did.  Instead traders were focused on a trio of economic reports that featured better than expected results.  The inflation report showed consumer prices gaining by 0.4 percent versus expectations of +0.3 percent.  Housing starts were strong but new building permits a little weak.  A reading on industrial production found it increasing by 0.7 percent compared to expectations of +0.3 percent.

***** Live cattle settle higher by $0.30 to $0.32 as feeders rally $1.05 to $1.42; June hogs down $0.27 with the deferred months $0.02 to $0.22 higher.  *****

   # Futures traders couldn’t ignore another set of strong gains in the wholesale beef market.  Choice cuts were $2.66 higher while select jumped $3.86 on the midday report.  Still, the board posted only small gains as traders have doubt that last week’s higher cash prices will hold up.   
   # Bear spreading was a main feature of the day’s futures trade for hogs. A weaker cash market limited upside for the nearby contracts.  Wholesale prices were mixed with strength in bellies offset by lower hams to keep the carcass average flat.