AgriVisor Morning MarketWatch

Thursday, April 18, 2019
***** Corn and soybean fractionally changed; Chicago wheat down 4 cents heading into the morning break. ***** 

   # Wheat is a drag on the grains again to start. Weekly export sales mostly missed the mark. Weather isn’t much of a worry yet for the big speculators. U.S./China trade talks are still progressing, albeit slowly. 
   # Negotiations toward a new U.S./China trade deal will be extended with a next round of in-person meetings scheduled for the last week of April and first week of May. Persons close to the talks say the intention is to have terms wrapped up by late May. 
   # This week’s ethanol supply report was a friendly one for a change. Ethanol production increased 1.4 percent and was slightly ahead of the year-ago output reading, all while stocks of the fuel alcohol drew down by 517,000 barrels or 2.2 percent for the week. Higher oil and gasoline prices are helping to boost ethanol margins slightly after a tough several months for processors. 
   # Lawmakers await a report from the International Trade Commission intended to outline the economic implications tied to the newly-proposed U.S.-Mexico-Canada trade agreement. The White House is said to be preparing a public push toward U.S. ratification of the deal, which relies on a vote by Congress. Mexico has been top buyer of U.S. corn so far this year, with purchases up 14 percent over the 2018 tally; Mexico is in the number two spot for biggest soybean purchases. Canada is a top five buyer of U.S. pork and beef and an even bigger customer of processed foods. 
   # Wednesday rainfall totals were heaviest in southern Minnesota and central Wisconsin. Up to three inches fell in isolated parts of south-central Illinois. Showers continue this morning but the system is breaking up as it moves into the Eastern Corn Belt. Weather looks to remain volatile in the South today and tomorrow, where tornadoes threaten to pop up in between thunderstorms. The 6-10 and 8-14 day forecasts call for the wetter than average trend to persist, but warmer temperatures will help spur fieldwork and planting where heavy rains are missed.
   # Chicago wheat futures made a minor rebound on Wednesday to correct from a Tuesday tumble that put the July contract under its lower Bollinger Band. Sellers are back at it this morning, attempting to capitalize on bearish technical sentiment generated after the corrective rally failed at the start of April. WN19 now trades back near its contract low of $4.35 1/2. Initial resistance on the upside likely comes from last week’s $4.68 3/4 high. 
   # The computers continue to successfully defend massive short bets held by the hedge funds. Money managers maintain a record net-short in the corn market, now estimated at almost 300,000 contracts. The large speculators are thought net-short soybeans by 85,000 contracts and net-short Chicago wheat by 75,000 contracts. 
   # U.S. stock futures are little changed as investors wait to see the release of Special Council Robert Mueller’s report on the investigation into alleged 2016 U.S. election interferences.     

***** Cattle futures waiting for guidance from the cash market; hogs still finding support from ASF concerns. ***** 

   # Cattle futures are rebuilding technical momentum as the nearby contracts retake support from their major moving averages. The trade awaits fundamental guidance from a cash trade that may start to become more active today and a Cattle on Feed report due out on Friday.               
   # Hog futures are facing small pushback from technical sellers after rallying back to contract highs achieved earlier in the month. Expectations of increasing pork export demand help support, but traders are waiting to see the next round of sales data, which will be released Thursday morning.