AgriVisor Morning MarketWatch

Tuesday, April 11, 2017
***** Corn futures down 3/4 to 1 1/4; soybeans up a penny; Chicago wheat down 1. ***** 

   # Light volume for the grains overnight.  The soy complex was finding some support from higher Asian palm oil prices, but gains are fading toward the break.  
   # May corn futures are working up against technical resistance from their 100-day moving average.  The contract trades short of its April 1 high at $3.71 3/4.  Nearby soybean futures have spent the first several days of April in a consolidation phase, not yet mustering up enough strength to move above their 10-day moving average.   
   # Report day.  USDA analysts will release updated supply and demand estimates at 11:00 am central.  The average trade guesses are: U.S. corn ending stocks up 22 million bushels to 2.342 billion, U.S. soybean stocks up 12 mbu to 435 million, world corn stocks up 1.5 million tons, world soybean stocks up 1.4 mt.  
   # Brazil’s CONAB crop agency upped its estimates for the country’s corn and soybean crops: corn up 2.5 million tons to 91.5 mt, soybeans up 2.6 mt to 110.2.  Traders will expect USDA to follow suit today and revise its predictions for the crops higher.    
   # Monday’s Crop Progress report included a first look at corn planting progress.  At three percent, sowings are on pace with average and just behind last year’s four percent.  The report rated U.S. winter wheat at 53 percent Good or Excellent versus 56 percent last year.  
   # Farmers in Brazil’s major corn grower Mato Grosso collected some light rainfall at the start of the week.  The forecast for the region runs dry for about a week, with an expected moisture event after that to be crucial for second crop development.  
   # Showers linger in the Eastern Corn Belt today.  A warm front is expected to develop to bring another round of storms to the Midwest starting tomorrow.  The two-week maps stay warm and wet.   
   # Hedge funds carry a large bearish grain bet into today’s crop report.  Managed money is estimated net-short corn by 150,000 contracts, Chicago wheat by 135,000.  The soybean position is now about flat after having been long for an entire year.    
   # The grains do not find much direction from outside markets overnight.  Oil is flat after a three-session rally.  Global equity markets are slightly defensive as investors price in increasing geopolitical risk.  

***** Cattle futures look to give back some of Monday’s gains; hogs likely to start mixed. *****

   # April live cattle futures enter the delivery period still holding a strong premium to the deferred months and the front of the curve is still discounted to the cash.  A weaker bias for boxed beef lately indicates the cash can do most of the work to converge with the June contract trading at $112.     
   # Hog futures are pressured by technical sellers but find some support from resilient pork prices.  Traders will keep focus on the cutout values for guidance on today’s trade.