AgriVisor Afternoon MarketWatch

Friday, June 03, 2016
***** Corn futures up 3 to 4 cents; July soybeans down 12 1/4, November up 3 1/2; Chicago wheat gains 9 to 11 3/4. ***** 

   # Grains moved higher on a short week: corn futures gained 5 1/2 cents over four sessions while nearby soybeans jumped 45 1/2 and Chicago wheat was up 15 3/4. Stocks finished lower with the Dow down about 50 points on the week.  The dollar index dropped 1 1/2 points.  
   # Fund traders came in to find the soy complex rallying further but decided the last day of the week would provide a good opportunity to take some profit.  Most pressure on nearby bean and meal contracts was a result of unwinding bull spreads as opposed to outright position liquidation.   
   # The weekly CFTC report showed fund traders upping their net-long soybean position to 209,000 contracts while building length toward a net corn long of 131,000 contracts.  The large speculators added more shorts to what ended up being a bearish Chicago wheat bet of 91,000 contracts as of last Tuesday.  
   # The noon updates have the National Weather Service maps leaning drier in the Midwest over the next 6-10 days.  A higher chance of above-normal precipitation creeps back into the 8-14 day outlook.  The next two weeks could feature much-above-normal temperatures for some.  
   # Poultry flocks in Brazil are shrinking due to higher feed prices that are resulting from dwindling corn supplies on hand and smaller expectations for the country’s second crop.  Hog production is also affected.
   # The closely-watched analysts at Informa updated some of their crop production estimates.  The guess for U.S. winter wheat output climbed 43 million bushels to 1.448 billion.  Brazil’s 2016 soybean crop is seen at 98.5 million metric tons versus USDA’s 99 million.  The Argentina soybean crop is pegged at 55 million tons versus USDA at 57.  
   # Trading was active in outside markets after the April jobs report featured a few surprises.  Payroll gains were only 38,000 when +158,000 were expected.  The unemployment rate fell to 4.7 percent, but only because of lower labor participation.  The dollar dropped hard after the report release while stock traders were left having to weigh disappointing economic news against the resulting lower likelihood of a June or September interest rate hike.     

***** Live cattle up $0.15 to $0.45 as feeders rise $0.10 to $0.27; hog futures finish higher by $0.27 to $2 with relative strength in the back months. ***** 

   # The cattle market found support from a cash trade that was dealing at $128 live in Kansas, or $3 higher than was observed the previous week.  Futures gains were limited as traders were comfortable with the board’s discount to cash.                 
   # Hog futures made gains on the back of cash market optimism.  Indeed, direct hogs ended up trading higher by about $1 on the day.  The cutout average was down after bellies gave up all of Thursday’s $3 gain.