AgriVisor Afternoon MarketWatch

Friday, May 27, 2016
***** Corn futures up 3 1/2 to 4 1/2 cents; soybeans gain 5 3/4 to 7; Chicago wheat steady. *****

   # Friday was not as quiet as some pre-holiday trading sessions can be.  Corn volume was slightly above average for what has been relatively high-volume month for the grains.  Soybean volume was on the light side, though.    
   # Fresh six-month highs for corn come on a sixth-straight stronger close for the grain.  With one trading day left in May, July corn futures are up 21 cents on the month.  Soybeans finished up on the day but did not best Thursday’s highs.  
   # Chinese officials reported corn sales of 889,000 metric tons after it wrapped up the day’s auction of state-owned reserves.  The government had planned to sell up to 2 million tons.  Still, many analysts viewed the volume and price numbers as turning out favorable relative to expectations. 
   # A host of daily export sales were announced.  110,000 tons of soybeans were booked by China for the 2016/17 marketing year.  100,000 tons of meal were sold to an unknown destination for 2016/17 delivery.  And, 130,000 tons of corn was sold, this couple of cargos to an unknown buyer for 2015/16.
   # Tuesday’s Crop Progress report should show the corn crop up to 95 percent planted, soybeans 72-75 percent.  Farmers in the Eastern Corn Belt were able to make some catch-up progress this week. Those estimates will overshoot if weekend weather turns out as wet as is currently forecasted.
   # Talk of La Nina resurfaced this week after U.S. and Australian meteorology agencies gave updates on the matter.  U.S. NOAA gives La Nina a 50 percent chance to develop in June/July/August with a 75 percent likelihood for thresholds to be triggered in September/October/November.
   # Dry weather is not currently a worry; too much water has been concerning for some.  A band of ground from southern Missouri through eastern Kentucky has collected rain totals well above normal in May.  
   # Abundant moisture is making for tremendous yield potential for the hard red winter wheat crop.  But, excess moisture could become a source of trouble if it comes to threaten quality or delay harvest.
   # Comments from Federal Reserve Chair Janet Yellen indicated that traders should be ready for higher interest rates “in the coming months.”  The chance of a June rate hike is still thought to be well below 50 percent, but a September increase has become more likely.  Dollar index futures rallied after the speech was made.          

***** Live cattle up $0.77 to $1.07 as feeders gain $0.85 to $1.30; hog futures up $0.50 to $1.30. *****

   # Memorial Day weekend will kick off a summer grilling season that will feature cheaper beef.  Competitively priced relative to pork, beef should be heavily featured at the grocery store in coming weeks. Cash deals were being made this week at $124-$125 live, $196-$198 dressed.        
   # Hog slaughter looked to have peaked before climbing again this week.  Abundant pork supplies are competing with attractively-priced beef.  This week’s export report confirms that recent dollar strength has curbed trade business, so the domestic market is not getting as much help in clearing surplus inventory.