AgriVisor Morning MarketWatch

Friday, May 11, 2018
***** Corn futures down 3 cents ahead of the break; soybeans off 7 to 8; Chicago wheat lower by 3 to 4. *****

   # Grains are falling weaker late in the overnight session.  Outside markets are quiet.  
   # The May WASDE report was priced into the market after its release on Thursday.  Lower than anticipated global corn stocks were friendly, as was a smaller U.S. new-crop soybean carryout.  
   # Today’s session will be used to price in weekend weather expectations.  Scattered showers may move through the Midwest tonight and tomorrow but strong totals are not in the forecast.  The Corn Belt turns wet again about Wednesday of next week and looks to stay that way through the 6-10 and 5-14 day outlook periods.  
   # Showers are popping up in Southern Brazil today to the relief of farmers there that have been struggling with late-season drought.  USDA on Thursday cut its estimate for Brazil’s corn crop and further reductions are thought likely.
   # July corn futures are starting with a key test of resistance from $4.00, which was the report day low.  July soybeans are down against their 200-day moving average this morning. 
   # Export sales were disappointing this week with new corn bookings coming in at 27 million bushels and down from 40 mbu in the week prior.  Soybean sales of 13 mbu were down from 15 mbu last week.  Old-crop wheat sales were just 1.3 mbu.   
   # China department of agriculture projects that the top-importer will bring in 95.65 million tons of soybeans next year.  That estimate falls short of many analysts looking for something nearer to 100 mt.  For reference, last year’s U.S. bean crop totaled 119.52 mt.  Brazil’s current crop is expected to come in near 116 mt.  
   # Investors are for now largely shrugging off market risk related to increasing Middle East tensions.  Some are actually turning more optimistic about world peace prospects after it was announced that President Trump will meet with North Korea’s leader on June 12th in Singapore.       

***** Livestock futures look to start firmer on follow-through from Thursday’s strength. ***** 

   # A strong technical close for June live cattle futures helps to build the case that a short-term bottom is in place near the $100 mark.  Boxed beef prices are gaining in the usual seasonal fashion and the board’s discount to cash supports the former.        
   # Hogs are being supported by a light short-covering initiative that was triggered as June futures retook chart support from a few of the major moving averages.  Production is ramping up and exports have turned a bit sluggish, but domestic demand is proving strong into the start of summer.