AgriVisor Morning MarketWatch

Friday, March 09, 2018
***** Corn down a penny; soybeans off 7 3/4 to 12 1/4 cents; Chicago wheat lower by 5 1/2. *****

   # The soy complex suffers losses overnight in follow up of Thursday’s crop report.  Corn futures are lower but face only a fraction of the pressure on beans and wheat.  Outside markets are quietly higher.  
   # USDA cut its U.S. old-crop corn carryout estimate by 225 million bushels yesterday, to 2.127 billion bushels, representing a contraction for supplies year-over-year.  Smaller ending stocks followed from additions made to both the ethanol and export targets.  
   # For soybeans, carryout went up from 530 to 555 million bushels, which is much higher than the 302 mbu left over in 2017 and 197 mbu in 2016.  Most had expected soybean carryout to hold unchanged. The government analysts cut the export goal by 35 mbu while raising the crush estimate by 10 mbu.    
   # Cut were made for both Brazilian and Argentine corn crops, helping to bring the global ending stocks projection down by 2 percent.  
   # USDA raised Brazil’s bean output prediction to 113 million tons to match Conab’s estimate.  Soybeans in Argentina came down from 54 mt to 47 mt.  
   # The report was a little negative for wheat after USDA cut U.S. exports and raised the world ending stocks estimate.
   # The report was a reminder that U.S. corn demand is looking good but that supplies of all the major grains remain abundant.  Traders will turn back to watching weather, knowing that further cuts to South American supplies could be made in future WASDE updates.  
   # Conditions look dry through the weekend in Argentina, but a solid shot at rain comes next weekend.  Farmers in Brazil should have an open window for soybean harvest/second crop corn plantings.  
   # Investors are mostly cheering news that President Trump has agreed to meet with North Korean leader Kim Jong Un.  There remains concern over trade war potential after the president signed an executive order levying new tariffs on steel (25 percent) and aluminum (10 percent).

***** Cattle futures biased weaker but nearing oversold; hogs work to rebound after dismal start to the year. *****

   # The supply and demand report included a reduction to 1st quarter beef output and an addition to 2nd quarter production.  Technical selling was seen a bigger feature of Thursday’s selloff, with futures turning lower after a failed attempt to clear resistance from the major moving averages.    
   # USDA lowered its estimate for 1st and 2nd quarter U.S. pork production, but the projections are still record high. Some are fearful that exports are slipping in a way that will help cause stocks to build at a quicker than anticipated rate.