AgriVisor Afternoon MarketWatch

Thursday, May 19, 2016
***** Corn futures settle lower by 7 1/2 to 9 3/4 cents; soybeans off 3 3/4 to 5 1/4; Chicago wheat down 7 1/4 to 11 1/4. ***** 

   # It was a risk-off trade for most major markets.  Wednesday’s Fed minutes sparked a dollar rally that placed broad pressure on the commodity space.  The prospect for higher interest rates also weighed on U.S. equities.  
   # A solid export sales report failed to lend any support to the grains.  Corn sales were well ahead of the average trade guess, but fell short of the most aggressive estimates.  With two weeks left in the marketing year, wheat sales do not look likely to meet the USDA target.  
   # USDA announced a daily sale of 129,000 metric tons of soybeans.  The shipment is destined for China and good for delivery in the 2105/16 marketing year. 
   # Government meteorologists released their updated 90-day outlook.  The maps indicate an equally likely chance of above or below normal precipitation for most of the Midwest.  The outlook does lean warm.
   # The U.S. drought monitor includes only a few small patches of dryness in the Midwest.  The lowest-intensity “abnormally dry” designation is given to a portion of southwest Missouri as well as an area circling the intersection of borders shared by the Dakotas and Minnesota.  
   # Drought is severe in Brazil.  Areas throughout the central swath of the country face 30-day precipitation anomalies of up to eight inches below normal.  Yield potential for Brazil’s second corn crop is hurt very much.  
   # The EPA’s new biofuels targets had analysts comparing the proposed ethanol mandate for 2017 against the current pace of production.  Most see room for the USDA’s 2016/17 corn grind estimate to rise.      
   # Soybean futures bounced off of session lows and finished in the top quarter of the day’s range.  July corn found technical support from its 200-day moving average.
   # Oil futures rebounded after earlier in the session racking up losses of more than $1 barrel.  The market holds strength on positive technical momentum and successful defense being played by bullish speculators.  

***** Live cattle down $1.05 to $1.70 as feeders give up $1.10 to $1.25; hog futures down $0.80 to $1.30.  ***** 

   # The wholesale beef rally stalled and paired with low cash market optimism to pressure cattle futures today.  June live futures closed the up-gap opened earlier in the month and settled short of resistance from the 50-day moving average.    
   # A negative turn for cash expectations and slippage for pork weighed on hog futures.  A leveling off for production and seasonal upswing in demand should provide general support for the market.