AgriVisor Morning MarketWatch

Friday, June 03, 2016
***** Corn up 2 at the break; soybeans higher by 7 to 18 3/4; Chicago wheat up 3/4 to 2 3/4. *****

   # Soybeans gain further in the overnight trade.  Firmer basis values out of South America, strong Chinese export demand, and various weather storylines are being used to help explain the bull run.
   # A simple explanation for the rally is that hedge funds have money to put to work and soy is the popular bet of the moment.  Money managers now hold a more bullish position in soy than they did in 2012.  They are estimated to be net-long of nearly 250,000 soybeans, 85,000 meal, and 100,000 corn.  
   # Soybean futures are at their highest level since August 2014.  $11.89 1/4 could serve as a next-point of technical resistance to the nearby contract.  Futures are vulnerable to a correction now that they register overbought by many short- and intermediate-term measures.  
   # Export sales were better than expected for corn at 52 million bushels.  Soybean sales for 2015/16 were fully anticipated at 11 million bushels but 2016/17 bookings were at the top-end of expectations at 27 million.   
   # Rain falls in the upper Plains this morning and should move east to make for a wet Saturday in the Midwest.  Excess moisture will continue to be a concern for a swath of the region running from southern Missouri through eastern Kentucky.  
   # Ethanol production is rising in seasonal fashion but also because margins are strong.  Processors look to be on track to meet the USDA’s 5.25 billion bushel corn grind target for the 2015/16 marketing year. 
   # OPEC’s inability to strike a deal on new output targets came as no surprise to traders and so the oil market was little affected.  Yesterday’s was the first OPEC meeting to include Saudi Arabia’s new energy minister and he found expected pushback from Iranian officials on production controls.  
   # Jobs day: Economists overshot on their estimate for May payrolls, which increased 38,000 versus a consensus of +158,000.  Also deviating from expectations were an unemployment rate that dropped to 4.7 percent and wages that grew 0.2 percent.        

***** Cattle futures look to open steady/firmer; hogs should start uneven on active spreading.​ *****

   # Expiration for June cattle options could stir some activity in the futures market before clear direction in the cash market is made known.  Live bids register near $123 against offers of $130.  Better wholesale prices achieved on Thursday could help improve cash sentiment.          
   # Gains for pork over the past five days have helped to improve sentiment in the hog market.  The carcass cutout average is up just more than $2 on the week.  July hogs reached new contract highs on Thursday but now approach technically-overbought territory.