AgriVisor Morning MarketWatch

Tuesday, March 21, 2017
***** Corn futures down a penny ahead of the break; soybeans unchanged; Chicago wheat lower by 1 to 2 cents. ***** 

   # Grain futures trade tight ranges overnight but have a slightly weaker bias as of this writing.  Soyoil is a lone but light gainer overnight, those contracts finding some help from higher Asian palm oil markets.  
   # Eyes are still turned to the fund trader, who during the last reporting week was a net seller of 100,000 contracts of corn.  Short sellers are waging a campaign in the wheat market, too, and are now back to having a bearish bet of more than 100,000 contracts.  The money manager remains net-long soybeans by about 100,000 contracts. 
   # The wheat market is pressured by expectations of rain coming to the relief of a dry Southern Plains winter crop.  Weather is likely to turn wetter toward the end of the week with rain coverage more widespread than it has been in months.  The current 8-14 day outlook also calls for above average precipitation for the region.  
   # Kansas winter wheat was rated 38 percent good or excellent on Monday’s Crop Conditions report for the state.  74 percent of Kansas topsoil is rated short or very short on moisture.  Oklahoma wheat is 40 percent G/E; Texas wheat 34 percent.
   # Wheat weakness is spilling over into the corn market, but the latter grain also has bearish headwinds of its own to deal with.  Traders are taking note of healthy moisture surpluses being built in Brazil’s top-producing state of Mato Grosso.  Recent estimates also have second crop corn acres higher than previously anticipated.    
   # Monday’s bearish outside day for corn futures is bringing technical sellers into the market today.  May corn is close to entering a gap from $3.58 1/4 - $3.62 left open on the continuous chart by the expiration of the March contract.  
   # The Central Illinois average corn basis is reported by USDA at 28 1/2 cents under May futures, soybeans at 35 1/2 under.  The Interior Iowa corn and soybean averages are 44 and 84 under, respectively.  
   # The dollar index is down and back below 100 for the first time in nearly two months.  The measure tracks our currency against the euro, Japanese yen, British pound, Canadian dollar, Swedish krona, and Swiss franc.  This morning’s move reflects mainly a stronger euro and pound.    

***** Cattle futures pressured by profit-taking near recent highs; hogs taking on weaker bias as demand expectations turn negative. ***** 

   # Upside for cattle futures is limited in the near-term by expectations for the boxed beef market to stall.  The board is still supported by its discount to cash, but the spread is not out of line seasonally.  Traders looking for guidance on intermediate-term price direction will gauge consumer demand in an upcoming important month of April.   
   # Hog futures take pause after making solid gains during the first half of March with traders waiting to see how the supply and demand dynamics in the cash market work themselves out.  Pork trade looks to be turning slightly sluggish and traders are skeptical that the historical rally for belly cuts will continue.