AgriVisor Afternoon MarketWatch

Wednesday, May 25, 2016
***** Corn futures up 5 1/2 to 7 1/2; soybeans gain 23 1/4 to 31 3/4; Chicago wheat higher by 2. *****

   # It was soymeal futures, rallying to new contract highs, that led the complex higher once again.  Bears argue that the meal move follows speculative overextension and that it is unsupported by the cash fundamentals.  Bulls contend that it’s not just Argentina crop loss to take into account but also quality loss that will turn buyers to the U.S. market.
   # Speculators are seen adding length to their bullish meal bet, which is now a net-long of about 75,000 contracts.  Record length for a bullish managed money meal position tallied 102,000 contracts in 2012. 
   # Meal reach new highs; beans did not.  Report Day’s $10.91 1/2 high stands for July soybeans.  $4.07 1/4 remains intact as resistance for July corn. Chicago wheat futures are still trailing behind the 10- and 20-day moving averages.    
   # Ethanol production was down for a second straight week, but stocks were lower as well.  Corn grind totaled 99.3 million bushels last week and now needs to average 98.1 million per week to meet the USDA’s 5.25 billion bushel target for 2015/16.
   # Traders will watch to see how China’s corn and rice auction unfolds on Friday.  The government will look to unload 2.2 million tons of corn and 200,000 tons of rice onto the market.  
   # Farmers in India are finding some slight respite from the scattered showers popping up intermittently throughout much of the country this week.  Record high temperatures and dry conditions have hurt production of crops like wheat, creating a shortfall which will have to be made up for by imports.
   # Worries are easing slightly over planting delays in the Eastern Corn Belt with a forecast that leaves most precipitation in West.  Illinois, Indiana, and Ohio are behind their five year averages.  The southern third of Illinois is the laggard with an estimated 80 percent of the corn crop planted.   
   # U.S. crude stocks dropped by more than expected last week on a 4.2 million barrel reduction.  Gasoline and blending products were steady to higher on the week.    
   # Stocks rallied for a second day as growing expectations for a summer interest rate increase are more than offset by a better attitude about the health of the global economy.  Strength was widespread throughout the various sectors; Wells Fargo, Google, Apple, and GE were notable gainers.  

***** Live cattle up $0.15 to $0.22 with feeders higher by $0.57 to $1.07; hogs gain $0.30 to $0.50. *****

   # Cattle futures rebounded, but only fractionally.  A bearish attitude persists on the part of traders who ditched longs after Friday’s Cattle on Feed report.  Light cash volume has traded this week at $125 in the South, where showlists are bigger.    
   # Hog futures bounced from oversold territory but found little enthusiasm among buyers based on the fundamentals.  The midday cutout report had the carcass average up but showed further weakness for bellies.  Cash deals were steady to $1 lower.