AgriVisor Morning MarketWatch

Friday, April 12, 2019
***** Corn and soybean futures fractionally firmer; Chicago wheat up 1 to 2 cents. ***** 

   # More of the same for grains, with futures trading quietly on light volume through the overnight session. Traders are assessing damage from this week’s storms while eyeing a possible window for planting in about two weeks. China trade news is mostly positive, if limited. Outside markets lean supportive of commodities this morning since stocks and oil are up and the dollar index is down. 
   # Monthly Chinese trade data showed the country’s soybean imports down in March by 13 percent from the year prior. Year-to-date soybean imports are lower by 14 percent. The U.S./China trade war is a contributor to softer soy demand, but hog losses due to African swine fever may be having the most sizable impact. 
   # Top wheat importer Egypt has issued an import tender to replace a cargo ship from France that was rejected earlier this week for failing an ergot fungus inspection. The U.S. recently won out on an Egyptian wheat tender, so exporters are hopeful that U.S. product will be in the running again. Generally poor export performance this year knocked Chicago wheat prices back by $1 from their February high to March low. 
   # A slow-moving storm system dumped healthy rainfall totals over a swath of the country that stretched from the Dakotas to the Great Lakes and also spanned from the Gulf of Mexico to the Canadian border. The heaviest precipitation was recorded in the upper Midwest where much of it came down in the form of snow. The system is still intact this morning and moving through the Eastern Corn Belt and most of the Mid-South. Another round of storms is still in the mix for the Midwest starting early Sunday morning. Rain is in the forecast again mid-week next week. A drier trend looks to develop in the 8-14 day outlook window. 
   # Argentina’s two trading houses, the Buenos Aires Grains Exchange and the Rosario Board of Trade, both upped their forecasts for that country’s corn and soybean production totals. Conditions have been near ideal in Argentina after the season started with notable flooding concerns. USDA analysts also bumped up the Argie corn estimate on Tuesday’s WASDE report release. 
   # December corn futures are struggling with chart resistance from their daily pivot at $3.89 so far this morning. The 10-day moving average is just ahead at $3.86 3/4. A move above $3.93 1/2 would put CZ19 at a new monthly high and may allow the contract to retake support from its 20-day moving average. Trading is still confined within the March 29 report day range, which leaves $3.99 in place as a key high. 
   # ADM has announced a voluntary retirement initiative that may reduce staffing in North America by some 1,800 employees. Rumors were that the ADM’s North American grain assets were up for sale or already sold, but company leadership denied the suggestion.  

***** June cattle futures have an eye on the cash trade ahead of becoming the delivery month; hogs still finding support from ASF concerns. *****

   # This week’s storms further disrupt the cattle industry, slowing weight gains and keeping slaughter rates low. Cash cattle were changing hands earlier this week at a steady $124, but better prices are thought possible into the week’s end. Nearby supply constraints are the primary bullish driver, while expectations of a big summer kill and poor recent performance for beef exports are the main bearish influence.           
   # China made a massive purchase of U.S. pork last week, data from the USDA showed on Thursday. The weekly sales total was a whopping 78,000 tons and reflected China’s sharp need for pork now that African swine fever has decimated production in the local industry. Analysts are projecting Chinese pork production to fall by some 30 percent this year.