AgriVisor Morning MarketWatch

Tuesday, June 14, 2016
***** Corn down 2 to 3 ahead of the break; soybeans off 5 to 9; Chicago wheat fractionally changed. ***** 

   # Grains fall back overnight with general weakness observed across the commodity space.  Risk-off sentiment continues to creep into outside markets ahead of several major macroeconomic events scheduled for the next two weeks.
   # This week’s FOMC meeting is one macroeconomic event this week that could send a shock throughout markets if the Federal Reserve defies expectations and raises interest rates.  Even without a rate hike, markets may feature heightened volatility as digest word from the central bank meeting.
   # Also on the economic calendar this week are today’s retail sales report, tomorrow’s Producer Price Index report, Thursday’s inflation reading, and Friday’s Housing Starts update.  The Bank of Japan meets this week to discuss monetary policy and Britain holds a referendum vote on leaving the European Union next week.  
   # Grains still maintain underlying support from a friendly weather forecast.  Rain fell over the Central Plains yesterday.  Scattered evening showers popped up to bring less than a tenth of an inch here and there throughout Illinois and Iowa.  The two-week outlook remains warm and mostly dry for the Corn Belt.  
   # Condition ratings for the corn crop held steady at 75 percent Good or Excellent, better than the 73 percent observed last year.  Soybean ratings improved two points to 74 percent G/E, versus 67 percent last year.
   # NOPA crush will be reported tomorrow.  May soybean crushings are expected to come in just short of 150 million bushels.  U.S. crush should remain active through the late season as farmers in Argentina face delays harvesting a shorter-than-expected crop.  
   # Analysts are starting to sharpen up their estimates for the June 30th Stocks and Acreage reports.  Acreage was a subject of conversation Monday after Informa analysts updated their own estimates, calling for corn acres to drop 1.04 million from the USDA March projection and soybeans to gain 1.53 million. 
   # July corn futures trade with the May 10 report day low at $4.20 as technical support.  $4.04 provides additional support above $4 as a 38 percent Fibonacci retracement target.  July beans test support from their 10-day moving average overnight.              

***** Cattle futures open with expanded limits; hogs start with technical support but may face pressure from weaker outside markets.​ *****

   # A wide discount from futures to cash fails to lend support to cattle futures and instead leans further negative to cash market potential.  August futures fell below the contract’s major moving averages on yesterday’s limit move and approaches the $110.92 lifetime low.                              
   # The ongoing seasonal dip in production keeps the hog market supported.  Futures enjoy added support as a result of strong technical momentum.