AgriVisor Afternoon MarketWatch

Wednesday, May 18, 2016
***** Corn futures settle higher by 1 1/2 to 2 1/2 cents; soybeans drop 5 to 9 3/4; Chicago wheat down 1 3/4 to up 1. ***** 

   # Acres switching was a subject of conversation today.  Planting delays, particularly for southern Illinois and the eastern Midwest, have some producers thinking about moving land from corn to soybeans.  The new-crop soy/corn multiple has come down over the past four sessions after having risen to the highest level of the year at 2.7.
   # Less acres may switch if the current weather forecast holds true.  Drier conditions are now expected for the Eastern Corn Belt over the next several days.  
   # With all of the talk about improved U.S. export prospects resulting from crop troubles in South America, there is more importance placed on the weekly sales reports.  Traders expect tomorrow’s tallies to show 43 million bushels of new 2105/16 corn sales with next-crop sales totaling something near 8 million.  Soybean sales should be 15 million old-crop, 5 million new.  
   # Early-season focus on soybeans and a less certain source of South American supplies have made for a late-season surge in U.S. corn export demand. Expectations for a smaller surplus of South American soybeans also keep the outlook for late-season U.S. soybean exports positive.    
   # Ethanol production was down slightly after last week’s strong showing.  Stocks were down slightly.  Corn grind was 99.5 million bushels versus 98.2 million now needed per week to meet the USDA target.  Ethanol prices have rallied in recent months on expectations for strong driving season consumption and improved export demand.  
   # While beans dipped, soymeal futures were steady to stronger.  July meal is at a one-year high on speculation that tighter supplies in Argentina will have export business directed back to the U.S. this summer.  
   # Analysts were caught off guard for a second week in a row by the results of the weekly energy inventory report.  Last week they expected to see crude stocks building and got a draw, this week a build instead of an anticipated draw.  Crude prices rose anyway, with bulls taking note of smaller than expected gasoline and diesel stocks. 
   # The dollar rallied while stocks and gold reversed lower after the April Fed minutes were released.  Central bankers indicated that a June interest rate hike is still very much a possibility.   

***** Live cattle down $0.20 to up $0.30; feeder cattle $0.27 to $0.57 higher; bear spreading pulls hog futures down $0.42 to $1.52.  ***** 

   # Wholesale beef prices moved higher yet, but June live cattle futures still notched in a small loss.  Friday’s Cattle on Feed report will give the trade some guidance. 
 Analysts polled by the Wall Street Journal look for total on-feed to come in even with last year while placements should be near 98.6 percent and marketings 101.6 percent. 
   # A lower cash market defied expectations and weighed on hog futures today.  USDA reported direct hogs in the Western Corn Belt dropping $2.33 to average $74.51 by midday.  The carcass cutout average was up $0.54 to $83.94.