AgriVisor Morning MarketWatch

Wednesday, April 19, 2017
***** Corn futures fractionally higher ahead of the break; soybeans up 3 3/4 cents; Chicago wheat down fractionally. ***** 

   # U.S. soy futures are starting moderately higher despite Asian palm and bean prices dropping further.  Corn and wheat futures both trade quietly within two-cent ranges overnight.
   # Outside markets are mostly quiet.  The dollar index is making a minor rebound after dropping a full point on two sessions this week.  European elections are keeping currency traders busy.  Stock markets are pricing in U.S. corporate earnings.  
   # Soyoil is becoming the key product to watch as its market starts price in possible changes made to U.S. biodiesel policy.  First put to question is whether or not the $1 per gallon production subsidy will be renewed and, if so, will it be applied to U.S. producers only.  A U.S.-only production credit would effectively curb the alleged dumping of product by Argentina that the U.S. Department of Commerce and Trade Commission agencies are currently investigating.
   # Weekly ethanol stats will be reported later this morning.  An impressive pace of production has led the USDA analysts to revising their corn grind estimates higher several times.  The ethanol use target was adjusted to 5.45 billion bushels on the April WASDE report.  When USDA first released estimates for the 2016/17 crop in May of 2016, the ethanol estimate was 5.3 billion.  
   # Crude traders will dissect a weekly stocks report from the government today.  The expectation is for domestic crude inventories to have drawn down by a little less than 1 million barrels last week.  A climbing rig count keeps the pace of U.S. production high, but good demand for the products is helping to keep stocks from swelling.  
   # Corn and soybeans were defensive yesterday on the expectation that farmers would make strong progress on planting before showers pop up again.  Rain is expected to disrupt planting efforts in Iowa today, but the bulk of Illinois should have an open window.  The 6-10 and 8-14 day maps still lean wet.
   # Soybean futures are having an inside day so far, putting minor points of support and resistance at $9.39 3/4 and $9.55 for the May contract.  Nearby corn is struggling with pushback from a converging pair of 20- and 200-day moving averages this morning.           

***** Cattle futures look to open steady/lower; hogs vulnerable to follow-through selling at the start. ***** 

   # Cattle futures are supported by ideas that the Chinese will start importing U.S. beef again.  No word yet on when any announcement on that might take place.  The short-run supply and demand fundamentals have also turned friendly with strong domestic consumption and exports lifting beef prices that in turn boost packer margins and keep the pace of production swift.  
   # Hog futures are pressured by selling from the fund trader and from the technical trader.  Hedge funds have been making steady cuts to their net-long position since the beginning of the calendar year as a result of an outlook for increasing production.  Chartists see a negative turn for the momentum indicators and a failure of the April lows to prop up futures.