AgriVisor Afternoon MarketWatch

Wednesday, June 08, 2016
***** Corn futures settle higher by 2 1/2 to 4 1/2 cents; soybeans up 31 1/4 to 34 3/4; Chicago wheat gains 10 to 11 1/4. *****

***Check grain advice.  

   # Speculators were seen adding length to their bullish grain bets ahead of Friday’s crop report.  Analysts expect to see cuts made on the U.S. and South American carryout estimates.  The bears suggest that the bulls could be set up for a ‘buy the rumor, sell the fact’ reaction to report.  
   # Not surprising for this time of year, weather is the central focus for market participants.  Crop conditions are very good at the start of the growing season, but a dry two-week forecast combines with speculation about La Nina potential to keep the weather storyline bullish.  
   # Also a supportive weather influence is talk of Brazil facing further corn trouble, still because of drought and now also because of frost/freeze threats.  
   # Ethanol output was up a sharp 4.8 percent on the week as producers responded to strong profit margins.  Stocks were down 2.6 percent at the same time, in part due to increased demand from motorists.  Corn grind was almost a season high at 105.6 million bushels, which is much above the 97.6 million bushels now needed to meet the USDA’s current target of 5.25 billion bushels.
   # The weekly export sales reports have taken on higher importance as traders look for confirmation that U.S. trade programs are going to benefit late in the season from tighter supplies and higher prices in South America.  Analysts look for new 2015/16 corn sales to come in north of 1 million tons again.  Soybean sales should be something near 500,000 tons for both old- and new-crop ledgers.  
   # The weekly energy inventory report was in line with expectations on its 3.2 million barrel crude stocks draw.  Gasoline stocks came in a bit higher than anticipated.  WTI futures reached new six-month highs on the day’s move.                  

***** Live cattle up $1.80 to $2.72 with feeders higher by $1.55 to $1.92; hogs settle firmer by $0.20 to $1.15 with more bear spreading featured. *****

   # Higher beef prices allowed traders to ease back on pessimism over cash price potential.  Clear weather over the weekend is expected to boost retail demand.  
   # Hog futures gained on expectations for tighter production this week, helped by lower marketings.  Domestic demand could use some help from better exports, which we will have a reading on tomorrow.