AgriVisor Morning MarketWatch

Wednesday, February 13, 2019
***** Corn futures are fractionally firmer; soybeans fractionally weaker; Chicago wheat up 1 to 2 cents at the break. ***** 

   # It is Wednesday night in China now and the day’s trade talks reportedly went well. Reuters reports that Treasury Secretary Steven Mnuchin said “so far, so good” when asked about how the latest discussions are going. 
   # Soybeans rallied on Tuesday with help from President Trump’s suggestion that the March 1st deadline for trade talks will not be enforced. That comes as relief to many after anxiousness was stirred last week by Trump saying that he wouldn’t likely be able to meet with Chinese President Xi before the end of the month. 
   # Fund traders are thought net-short corn by about 20,000 contracts. They have been proven less bullish than thought as the CFTC catches up on releasing trader positions data. Hedge funds are estimated net-long soybeans by approximately 10,000 contracts and are about evenly split long and short on Chicago wheat.
   # South American weather has made a favorable shift lately, allowing the dry parts of Brazil to replenish soil moistures while soggy ground in northern Argentina dries out. Healthy recent rainfall in central Brazil is setting up farmers there up for a nice start to the safrinha corn season. Second crop corn plantings are a little more than one-quarter done now that the soybean harvest has progressed at a similar pace. 
   # Early-season drought will have taken its toll on Brazil’s soybean yield this year, as confirmed by USDA’s cut to the output projection last week. The government analysts lowered Brazilian soybean production from 122 to 117 million tons. It still represents a big crop, but that number is expected to face further cuts, maybe down to 112-115 mt. USDA also made a minor addition to the Brazilian output estimate from last year, taking it from 120.3 to 120.8 mt.
   # March soybean futures are working to keep chart support from the contract’s 200-day moving average at $9.15 3/4. The key highs remain in place as resistance at $9.31 1/4 and $9.41. Soybean bears eye last week’s low at $9.03 1/2 as a first downside objective before the psychologically-important $9.00-mark comes into play.      
   # Oil and equity futures are higher to start. Crude oil prices find support from U.S. sanctions limiting oil exports out of Iran and Venezuela. Stock investors are optimistic about the prospects of a China trade deal and continue to be mostly pleased by U.S. economic data as of late. 

***** Cattle futures look to open steady/weaker; hogs try higher. ***** 

   # Cattle futures are running into technical selling after the February contract reached into overbought territory and stopped just short of the $127.95 lifetime high. Traders may also be reluctant to widen the premium for futures over cash, since recent cash strength has mostly been attributed to temporary weather influences.      
   # Hog futures have stemmed their slide with help from better cash and wholesale prices, but futures are not enjoying strong buying interest yet. The market remains abundantly supplied and demand is seasonally soft, but things could change in a hurry if a new U.S./China trade deal is inked.