AgriVisor Morning MarketWatch

Wednesday, April 11, 2018
***** Corn futures fractionally firmer at the break; soybeans higher by 6 1/2 to 7 1/2 cents; Chicago wheat down a nickel. *****

   # Soybeans continue higher but a lower wheat market drags on corn.  Stock futures are lower and oil firmer as investors price in risk of military action against Syria.
   # Tuesday’s crop report was mostly a snoozer.  Domestic corn ending stocks came in about exactly as anticipated while soybean carryout featured a slightly friendly surprise but was left at a still-robust 550 million bushels.  Argentina’s corn and soybean crops were cut along with Brazil’s corn estimate while Brazil’s bean estimate reached a record 115 million tons.  
   # Weather is becoming an increasingly important market influence now that the planting season is upon us.  No strong changes for the forecast, with the 6-10 day forecast leaning cold and mostly dry.  The 8-14 day outlook turns a touch wetter across the Midwest. 
   # Weather will be an important determinant of the U.S. acreage mix and so will price.  Higher prices all around for the ag markets have the potential to bring some small acres back into the mix.  A strong historical price premium for beans over corn may still lead to further switching.  The new-crop SX18/CZ18 futures multiple currently stands at 2.55.  
   # The Trump administration and industry leaders have been unable to strike a deal on potential changes to the Renewable Fuel Standard, so the parties have separated and will return to the negotiating table later this summer.  At stake are the biofuel mandates that require the blending of corn-based ethanol and bean-based diesel.     
   # Bloomberg reports on President Trump canceling a trip to meet with South American leaders so that he can stay involved with a possible military response planned against Syria for the recent use of chemical weapons.  Credit the related tension for oil futures gaining about $4 so far this week.   

***** April live cattle and April hogs both start with a test of resistance from their 10-day moving averages. *****

   # Same story for the cattle market with futures defensive because of growing production and an unfavorable weather outlook for early spring demand.  Supportive are the board’s discount to the cash market and technically-oversold position.     
   # Cold weather is also a negative for pork demand potential in the near-term, but seasonal price strength is still expected, especially as pork remains priced attractively relative to beef.