AgriVisor Morning MarketWatch

Thursday, June 02, 2016
***** Corn fractionally changed at the break; soybeans up 5 to 9 1/2 cents; Chicago wheat up 1/4 to 1 1/4. *****

   # Fund traders participated in Wednesday’s grain rally.  Managed money was a net-buyer of an estimated 10,000 corn, 10,000 wheat, and 10,000 soybean contracts.  With a current 215,000 contracts, the net-long soybean position is approaching record length.   
   # Soybean basis values have firmed this week.  Producers were aggressive in making old-crop sales during the previous few months but exporters will still have commitments to fill for late-season delivery.
   # An improved outlook for the U.S. corn and soybean export programs come as a result of higher prices demanded in South America and speculation that China is looking to cover soybean needs for the fall.
   # Traders took note of the National Weather Service’s two-week outlook maps turning hotter and drier yesterday.  Most of the Midwest should stay dry today but scattered showers could pop up in the southern regions of Illinois and Indiana. 
   # The move up off of Wednesday’s overnight lows on left $4.01 behind as important technical support for July corn futures.  A new six-month high was notched in this morning.  Next up for resistance is the October 7th high of $4.21.  
   # Wednesday was a bullish outside day for soybean futures.  Technical momentum has been rebuilding since the start of last week with a bullish crossover on the daily MACD almost made.  The real test will be whether or not fresh buying materializes above $11.
   # Higher corn and soybean prices were observed in China Thursday.  Market participants are eager to see the results of upcoming Chinese reserve auctions.           
   # OPEC producers meet today.  Observers doubt there will be a deal made on a new production target; one would likely come as a bullish surprise.  WTI futures continue to hover just below $50 a barrel.
   # Outside financial markets are quiet as traders await word from the ECB on European monetary guidance.  More important for U.S. markets will be the May jobs report, which will have heavy bearing on the Fed’s U.S. interest rate decision.    

***** Cattle futures look to start uneven while hogs may open with follow-through strength. *****

   # Cattle futures hold gains for the week but look to trade choppy until more guidance is provided by a cash market that has yet to develop direction.  Futures have narrowed the gap some with cash prices from last week that ended up trading at better-than-expected levels.        
   # A good start for post-holiday cash and wholesale markets helps to give hog futures support.  June futures made a strong technical close above their 50-day moving average on Wednesday and will start with a test of resistance from the 20-day.