AgriVisor Morning MarketWatch

Monday, May 22, 2017
***** Corn futures up 2 cents ahead of the break; soybeans higher by 2 1/2; Chicago wheat up 3 1/2. *****

   # Grains are firmer on moderate overnight trading volume.  Higher soy and palm oil prices in Asia provide some spillover support.  Oil being up and the dollar down help keep commodity market sentiment friendly.  Fresh news is otherwise limited.
   # Weekend rains were heaviest in southern Illinois and northern Indiana, but totals were lighter than anticipated for most throughout the Midwest.  Scattered showers may pop on in Missouri and Iowa today before a heartier system develops to move through east through the Corn Belt on Wednesday.  Memorial Day weekend looks like a wet one for most of the Midwest.  
   # Last week was all about Brazil and an accusation of bribery made against the country’s president that sent the real currency tumbling and U.S. soybean prices with it.  Brazil’s President Michel Temere has refused to resign and instead works to thwart the investigation against him.  The real is flat this morning after having made a substantial recovery on Friday.  
   # The Commitments of Trader report showed hedge funds still with a net corn short that exceeds 200,000 contracts.  But all traders are not bearish the grain, with 204,000 longs being held against 408,000 shorts.  A net soybean short of 37,000 contracts was produced by funds split by 133,000 shorts and 96,000 longs.
   # Average basis values for interior Illinois elevators were listed Friday at 23 cents under July futures for corn, 28 1/2 under for soybeans.  The Interior Iowa report listed the corn and soybean basis averages at 43 and 69 cents under, respectively.  
   # Kansas City wheat futures are growing a premium over the Chicago contracts as traders observe worry about hard red wheat in the Great Plains.  Freeze damage will already have cut yields throughout parts of the Wheat Belt while wet weather now threatens crop quality.  
   # Oil adds to gains of $2.50 last week as traders price in their positive expectations for this week’s OPEC meeting, which should end with an extension of the cartel’s otherwise ending production cut agreement.        

***** June live cattle start the week with a test of resistance from their 20-day moving average; hogs technically strong but vulnerable profit-taking.  ***** 

   # Fund traders liquidated more cattle longs last week but were hesitant to ditch the bullish bet altogether while the fundamentals were still leaning more friendly than not.  Cash cattle continued trading a hefty premium to the board.  The beef rally stalled but prices did not make a clear turn lower.  Today’s cold storage report will give the market some additional short-term guidance.  
   # Cash hogs are enjoying the anticipated seasonal bounce and pull futures along with them.  Pork is in high demand as it prices favorably against high beef prices at the grocery store.  The fundamentals are mostly friendly, but the board rally may soon run out of steam after nearby futures have climbed 17 percent from their late-April low.