AgriVisor Afternoon MarketWatch

Monday, June 13, 2016
***** Corn futures rally 7 to 9 3/4 cents; soybeans down 2 1/2 to 9 1/4; Chicago wheat off 1 1/2 to 3 3/4. ***** 

   # Weekend rains were light enough to combine with a hot, dry two-week forecast to be a cause for buying at the start of the week.  Chances for rain in the Corn Belt increase on Tuesday and Wednesday.  
   # The market may be starting to price in expectations for the June 30th Acreage report.  The general consensus among analysts is that corn area will drop 1-1.5 million acres from the March report and that soybeans will gain the same.  Analysts at Informa estimate a 1.035 million acre drop for the corn number and a 1.525 million acre bump to soybeans.   
   # Corn exports were up sharply on the week with inspections totaling 66.81 million bushels.  Shipments need to average 54.32 million bushels per week to meet the USDA’s current 1.85 billion bushel target.  Soybean inspections were also up on the week but fell short of the pace needed to meet the USDA goal.  
   # December corn futures traded 3 1/4 cents short of important technical resistance at $4.50 but booked a new one-year high on the move.  The July 2015 high at $4.38 3/4 serves resistance to the front of the futures curve.  Sustained buying interest could not be found as soybean futures approached $12 overnight.  $10.75 is a retracement target for the contract.    
   # The latest CFTC report showed hedge funds holding a position on agricultural commodities that is as bullish as it has been in two years.  A record net-long soy position is held while the corn position is as long as it has been since last July.  
   # Analysts from the USDA Beijing bureau estimated that Chinese soybean imports would total 85 million tons in 2016/17, short of the 87 million projected by USDA’s WASDE team last week.  The China group suggests changes to the state-run stockpiling programs could contribute to slower-growing import demand.  
   # Outside financial markets were lower on a risk-off trade day that followed the Orlando mass shooting and uncertainties growing over this week’s FOMC meeting and next week’s ‘Brexit’ vote.  

***** 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. *****

   # Follow-through selling hit cattle futures at the start and sent them lower until they were locked limit-down.  Fundamental traders were not impressed by cash market activity at the end of last week, even if it featured levels that maintain a considerable premium over the futures market.  Technical sellers played a role in today’s rout and capitalized on Friday’s give-up of support from the 100-day moving average.         
   # Higher pork prices helped keep the hog market supported at the start of the week.  A recovery for loin values helped boost the carcass average by $1.10 as of midday.  Speculators remain bullish on ideas that Chinese demand will remain strong and help relieve some pressure that plentiful domestic supplies would otherwise have on the market.