AgriVisor Afternoon MarketWatch

Friday, June 10, 2016
***** Corn futures settle lower by 2 1/4 to 3 1/2; soybeans up 2 1/4 to 10 1/2; Chicago wheat drops 14 to 15 1/4. ***** 

   # Soy bulls found ammunition ahead of the report in the form of a large daily export sales announcement.  An unknown buyer book 263,000 tons of soybeans, 203,000 for delivery in 2015/16 and the remainder for 2016/17.  Light profit-taking put pressure on corn and wheat for most of the pre-report trade.  
   # Reactions were bullish immediately following the report.  Wheat dove quickly after a brief uptick.  July soybeans broke $12 and climbed up by as much as 32 1/2 cents retreated to negative territory 30 minutes after the report release, and then managed to turn moderately higher into the afternoon hours.  Nearby corn rallied 10 1/2 cents following the report but reversed lower and never fully recovered.  
   # Better U.S. trade prospects were confirmed by upward revisions to old-crop corn and soybean export targets.  The corn export goal was upp 100 million bushels while the bean number increased 20 million.  Higher meal and oil exports pulled the soybean crushings estimate up by 10 million bushels.
   # Today's crop report leaned unfriendly for the wheat market after hard red production was revised higher.  1.9 bushels per acre were added to the all-wheat yield estimate, which added 79 million bushels to new-crop output.  Slightly higher beginning stocks also helped contribute to a higher ending stocks projection.  
   # Cuts were made to Brazil’s corn and soybean output estimates.  USDA analysts estimated the country’s corn crop at 77.5 million tons, down from the May projection of 81 million.  The May to June adjustment for soybeans was 99 to 97 million tons.  No revisions were made to the corn and soybean numbers for Argentina, though many had expected a cut to the bean estimate.  
   # The Brazilian production cuts contributed to a 2 million ton reduction for world ending soybean ending stocks in 2015/16 and a 1.4 million ton reduction to world corn.
   # Focus on the report allowed grains to divorce themselves from outside market influences.  A $1.50 drop for crude oil helped keep commodities on the defensive.  A strong dollar didn’t help.  Weaker equities and higher gold prices were featured in a general ‘risk-off’ type trade.  

***** Live cattle down $0.75 to $1.50; feeders off $0.90 to $1.75; hog futures down $0.40 in the front, October up $0.52. *****

   # Traders took profits on cattle longs ahead of the weekend.  A slow-to-develop cash trade created some uncertainty.  Cash bids improved coming into the afternoon but little volume has yet to be reported.       
   # Hog futures faced technical pressure at the open after Thursday’s bearish chart reversal.  Weaker cash and wholesale values helped put a negative spin on market attitudes early.  The WASDE report featured a small cut to the pork production estimate, but other changes were minimal and the balance sheet update influenced the market little.