AgriVisor Morning MarketWatch

Wednesday, February 28, 2018
***** Corn futures fractionally firmer; soybeans up 6 1/2 to 7 cents in the front of the curve; Chicago wheat up 5 3/4 to 8 3/4. ***** 

   # Up remains the current trend for grain futures.  Wheat leads overnight as speculators cover shorts on growing U.S. weather concern.  Corn and soy still benefit from shrinking crops in South America.
   # Hedge funds have built a net-long corn position of nearly 50,000 contracts after just two months ago having a record net-short of almost 250,000 contracts.  Crop troubles in Argentina help turn the speculator bullish, as do expectations for U.S. acres to switch away from corn. Money managers are net bullish soybeans by approximately 125,000 contracts.
   # The latest Illinois Crop Progress report rated state subsoil moisture supplies at: 2 percent Very Short, 20 percent Short, 69 percent Adequate, and 9 percent Surplus. USDA recorded the average February temperature at 29.4 degrees F. Average precipitation was measured at 4.9 inches, which is 3.2 inches wetter than normal.  
   # March corn futures bested key resistance at $3.70 on Tuesday while the most-active may works up against its 200-day moving average this morning.  The CK18 has not traded ahead of the 200-day since August of last year.  $3.83 would mark a 62 percent retracement of the contract’s slide from last July’s high.  
   # Soymeal futures continue to skyrocket higher in a move that puts the nearby contract close to $400/ton.  March meal is now up 25 percent since the start of 2018.  Bulls are buying on the idea that the U.S. will earn more export business now that crop troubles are faced by the world’s largest meal trader, Argentina.  
   # Outside markets are relatively quiet this morning.  Stocks were hit hard on Tuesday as investors priced in hawkish comments to Congress by the Federal Reserve Bank’s new Chairman Jerome Powell.  Market participants will sort through 4th quarter GDP data this morning.      

***** Cattle futures look to start weaker after Tuesday posting a bearish shooting star on the charts; hogs biased technically weak. *****

   # Cattle futures are supported by a resilient boxed beef trade.  Wholesale values are running almost 10 percent higher on the year as domestic demand helps to chew through inventories quickly.  $126 is benchmark trade to watch as cash cattle activity picks up this week.   
   # The direct hog market remains defensive and helps sellers maintain control at the CME.  April hog futures open with a test of technical support from their 10-day moving average while also facing overhead resistance from the 20-day.