AgriVisor Morning MarketWatch

Wednesday, March 07, 2018
***** Corn fractionally weaker at the break; soybeans down 1 1/4 to 3 3/4 cents; Chicago wheat off 2. *****

   # Traders prep for this week’s crop report.  USDA issues its next set of revisions to the supply and demand tables on Thursday at 11:00 am central.  U.S. old-crop carryout projections for corn and soybeans are expected to come down as a result of better exports for the former commodity and better crush for the latter. 
   # Cuts are expected for most of the South American production estimates tomorrow.  Further drought stress will have the government moving lower on Argentine corn and soybean crops.  The Brazilian corn crop projection should come down as analysts see planting delays persist while that country’s soybean crop is expected to grow from the USDA’s last 112 million ton estimate. 
   # The U.S. 6-10 day outlook leans drier than previous runs, keeping rains away from a parched Southern Plains.  Better chances for moisture come in the 8-14 day forecast. Warmer temperatures in late March will be expected to follow another brief cold spell this week.     
   # An inside day so far for May corn with $3.88 1/2 being yesterday’s high.  Next up for a key high is last fall’s $3.95 high.  The contract best is $4.31 3/4.  The relative strength index near 77 reads short-run overbought, portending a potential correction toward the 10-day moving average at $3.80 and a retracement support target at $3.75.
   # USDA’s Cash Grain Prices report listed the Central Illinois basis averages at 27 cents under May futures for corn, 44 cents under for soybeans.  The corn and soybean basis averages for the Interior Iowa region were pegged yesterday at 45 and 87 cents under, respectively. 
   # Fund traders head into the crop report with net-long corn and soybean positions, by about 125,000 contracts for the grain and 175,000 for the oilseed.  The large speculators are near split on their wheat bets.  
   # Markets are skittish on news that Goldman Sachs’ Gary Cohn is resigning as White House chief economist over his disagreement with President Trump on new tariffs.  It is looking more likely that the president will move forward with plans to levy a 25 percent tax on steel imports and a 10 percent charge on aluminum.     

***** Livestock futures vulnerable to follow-through chart selling and spillover weakness from lower outside markets. *****

   # Cattle futures are trending weaker but still find support from a resilient boxed beef market.  Wholesale beef prices are being helped by a slightly slower slaughter pace.  Traders may not want to let the board slip considerably further until more is known about the direction of this week’s cash trade.    
   # Hog futures turned back lower on Tuesday along with weaker cash and wholesale markets.  Technical traders were also interested at selling April hogs near their 20-day moving average.