AgriVisor Morning MarketWatch

Thursday, June 09, 2016
***** Corn down 2 to 4 cents; soybeans fractionally lower; Chicago wheat off 5 to 6. *****

   # Grains follow up a big rally day with some light profit-taking overnight.  Wednesday was another very active trading day, with corn and wheat volume at their highest levels since late April.  Open interest rose by another 19,000 corn contracts while increasing 6,000 for soybeans and 9,500 for Chicago wheat. 
   # Soybeans popped higher after a strong export sales report.  New commitments for 2015/16 totaled 758,500 tons versus top-end expectations of 500,000.  New-crop sales booking were also solid at 475,500.  Old-crop corn sales beat expectations at 1.56 million tons but new-crop sales of 120,400 were on the low side.     
   # An improved outlook for Chinese demand has been viewed as a primary driver of the recent soy rally.  Data this week showed strong commodity imports last month and speculation remains that China’s soybean bookings for the fall will be strong.  
   # Brazil’s crop agency has cut the 2015/16 corn production forecast to 76.2 million tons versus the USDA May estimate of 84 million.  The country’s soybean harvest is now pegged at 95.6 million tons versus USDA at 99.   
   # Wet weather in France has threatened the country’s wheat crop, but it remains in very good shape for now.  The weather worries have helped boost European wheat prices and further fuel active short-covering in Chicago.  
   # Soybeans trade within the wide chart range opened on Wednesday’s rally.  The day’s highs and lows at $11.89 1/4 and $11.38 now serve technical resistance and support to the July contract.  $12 is important psychological resistance for futures and is a mark that roughly coincides with a 38 percent retracement of the move down from the all-time high to this year’s low.
   # The forecast for the Midwest still features at least two weeks of hot temperatures.  Scattered showers could be observed in the northern Midwest today.  Storms are expected to roll through the Corn Belt early next week.  
   # Outside markets are less supportive overnight.  A higher dollar place some general pressure on the commodity sector.  Stock index future are lower as trades wait to see this week’s Jobless Claims report.  WTI crude futures are lower but still trade over $50 a barrel.   

***** Cattle futures look to open steady/stronger; hogs face pressure from overbought technicals. ​*****

   # Cattle futures followed beef prices higher on Wednesday.  Cash optimism follows from better wholesale values and a smaller showlist for this week.  Increasing temperatures should begin to slow weight gains.  Traders are debating whether hot weekend temperatures will be on balance good or bad for grilling demand.                  
   # Hog slaughters run higher so far this week but production should begin to come down as a result of slower marketings and lighter weights.  Traders were eager to see the morning export sales report.