AgriVisor Morning MarketWatch

Wednesday, June 08, 2016
***** Corn up 1 1/2 to 2 1/2 cents ahead of the break; soybeans gain 11 1/2 to 13 3/4; wheat up 1 1/4 to 2 1/2. *****

   # The soy complex is again a leader overnight.  Bean futures have gained in 46 of the previous 70 sessions and are up $3, or 35 percent, since March 1st.  Meal futures are up 59 percent over the same period. 
   # Tuesday was another high-volume trade day for the grains.  Corn open interest inched higher by 3,800 contracts as new fund longs enter the mix.  Soybean open interest was down slightly but still hovers near an all-time high.     
   # It is yet to be seen whether or not bullish speculators will want to take profits ahead of Friday’s crop report.  Analysts expect the WASDE update to feature small cuts to US old-crop carryout for corn and soybeans.  South American production revisions should include lower Brazilian corn and lower Argentine bean crops.
   # The major corn growing regions of Brazil continue to run dry.  Colder temperatures bring a frost/freeze threat to southern Brazil over the next few days.
   # The Kansas wheat harvest begins in earnest this week.  Wet weather has delayed the start of harvest for some, but has generally provided the hard red wheat region with tremendous yield potential if not some disease worries.
   # A weaker dollar lends support to commodities overnight.  The dollar index has been down in each of four sessions since the disappointing May jobs report triggered a sell-off.  Traders are pricing in just at 50 percent chance that U.S. interest rates will be raised before December.  
   # Scattered showers could pop up in areas throughout the Corn Belt at the end of the week, though significant coverage would come as a surprise.  Hot temperatures are the current topic of interest with much of the Midwest expected to see 90+ degree days this weekend.      
   # Oil rallies further ahead of the weekly inventory report.  Traders expect to see U.S. crude inventories having dropped 3.1 million barrels last week.  

***** Cattle futures look to open steady/weaker; hogs face technical pressure at the start. *****

   # Cattle futures have featured two days of weaker closes after firmer starts this week.  Bears suggest that recent gains in the wholesale market could find push back from demand, especially if hot weather lasts long enough to keep beef consumers indoors and away from their grills.                
   # Hog futures turned away from fresh contract highs on Tuesday as traders took profits on a technically-overbought market.  Direction from the cash and wholesale markets is not as friendly this week as it was toward the end of last.