AgriVisor Afternoon MarketWatch

Tuesday, May 24, 2016
***** Corn futures settle steady; soybeans down 3 3/4 to 7 with relative pressure on the new-crop contracts; Chicago wheat up 2. *****

   # Grains were down; then up; then back down.  A litter of small news items popped up throughout the day to keep traders talking.  
   # Fund traders have done well in defending their long soy bets as a whole but at the same time have shown a willingness to want to take profit on up days.  They continue to maintain a rough net-long of around 200,000 contracts, which hovers just short of the 2012 record.     
   # Another daily soybean sale was added to the books.  USDA reported 140,000 metric tons headed to an unknown destination for 2016/17.  
   # Traders were talking about strong soybean demand from China.  The top bean importer may look to source additional late-summer needs that could end being added to the U.S. old-crop sales ledger.
   # USDA will issue its first-look at corn crop condition ratings this coming Monday.  The good/excellent ratings averaged 75 percent in 2014 and 2015.    
   # More talk of El Nino/La Nina today.  Ocean surface temperatures in the equatorial Pacific have cooled enough to signal the exit of El Nino.  The current consensus among meteorologists gives a 50 percent chance to La Nina developing in the June/July/August timeframe.  
   # Farmers in India are working against a heatwave under which record temperatures of up to 123 degrees have been recorded.  The country has not yet transitioned into monsoon season.  
   # Corn futures above $4 are being met with a slight uptick in producer selling.  Central Illinois basis is weakening a touch this week.  Farmers are still well behind their average pace on new-crop corn sales.  May has historically featured near the least amount of producer corn sales of any month.    
   # Monsanto indicated that Bayer’s $62 billion takeover offer undervalued the company, but lines of communication between the two corporations are left open.  Analysts expect Bayer to come back with a higher number.  

***** Live cattle down $0.15 to $1.27 with feeder cattle off $0.05 to $1.32; hogs down $0.30 to up $0.60. *****

   # The cattle market was pressured further by follow-through selling after the Cattle on Feed report sent futures limit lower on Monday.  Bears had the upper hand after opening a down gap at the start of the week.  June still maintain some room above the $113.90 contract low.  Futures’ discount to cash should lend some support to the board going forward this week.       
   # Hog futures recovered from early-session weakness, helped by technical buying.  Five down days in a row sent the June contract to its lower Bollinger Band.  Buyers stepped in near the 200-day moving average.  Fundamental storylines remained bearish with cutout values down and cash expectations less than optimistic.