AgriVisor Morning MarketWatch

Wednesday, April 12, 2017
***** Corn futures down fractionally ahead of the break; soybeans up 5 to 6 1/4 cents; Chicago wheat fractionally lower. *****

   # Soybeans bounce after the sellers failed to capitalize on Tuesday’s crop report.  World soybean ending stocks were ratcheted up another 4.5 million tons, but traders now seem more concerned with covering shorts as we enter the U.S. planting season. 
   # With active spring weather comes a more active grain trade.  So far, average combined daily trading volume for corn, soybeans, and wheat is 779,000 contracts in April compared to 528,000 in March. 
   # A few planters have been spotted moving out in the Midwest this week, but progress is limited and may remain that way while scattered showers continue to pop up.  The forecast has rain in store for most of Iowa and northern Illinois today and tonight with more moisture for the same area and also Indiana on Friday and Sunday.   
   # At nearly 300,000 contracts net-short, the fund trader is holding a historically-large bearish bet on the grains for this time of the year.  The large speculators have withdrawn substantial length in the soybean market to get to net-flat.  Hedge funds are not expected to continue waging a selling campaign while wet forecasts threaten to delay planting starts.  
   # Traders will have a look at the weekly ethanol production report today.  USDA analysts cited record ethanol output as reason to increase the grind target by 50 million bushels.  USDA tracks a measure of spot margin for Iowa corn processors, currently at $1.90 compared to $1.53 a year ago.
   # May soybean futures trade above their 10-day moving average for the first time in several sessions.  $9.50 holds as an area of tough psychological support.  Nearby corn futures trade not far from a test of resistance at the April 1 high of $3.71 3/4. 
   # Oil traders are sifting through a monthly report from OPEC, attempting to gauge how well the cartel is sticking to its production cut agreement.  Many remain bullish on ideas that OPEC will extend those cuts into the second half of the year.  Geopolitical risk premium involved with tensions over Syria and North Korea also help keep the market supported.    

***** Bias shifting more bullish on cattle but futures reaching short-term overbought; hogs likely to soon find support from profit-taking on shorts. ***** 

   # A substantial rebound for boxed beef prices and surprising resilience for the cash market this week help to support cattle futures.  Demand from the domestic consumer is running slightly better than expected, but exports are also doing a good chunk of the work to keep inventories from swelling.  
   # The hog market is pressured by an abundancy of market-ready animals, but like for the cattle market, traders seem to be finding surprise in the strength of demand at the start of spring.