AgriVisor Morning Marketwatch

Wednesday, June 15, 2016
***** Grains are slightly higher to start the day; soybeans 4-5 higher, corn 2 higher, and wheat 3-4 higher. *****

   # Other than weather, grain specific news is rather limited as we start the trading day.  The Federal Reserve will be the main news focus today, with the trade looking ahead to the end of their meeting and new policy announcements.
   # Fed meetings usually end at 1 pm. Central time, with policy announcements coming at that time.  Yesterday’s retail sales report would have spawned ideas the Fed might announce a 1/4 point rate increase at this meeting, but the recent poor jobs number has biased thought against that, with the Fed expected to announce a steady interest rate policy. 
   # The other big feature impacting world forex and equity markets is the looming British vote on the 23rd as to whether they should leave the EU or not, a situation oft referred to as “Brexit.” That is generally subduing equity markets and supporting the Dollar.  In the overnight trade though, world equity markets were a little higher ahead of the Fed announcement.
   # In the absence of other news, weather has, and will, dominate the grain trade.  Rains the last 2-3 days have been about as expected.  In the Midwest, Missouri, southern Iowa, southern Illinois and eastern Kansas have largely missed rains.  Into the weekend, rains will largely be focused on the East and across the northern tier of the country, including the Canadian Prairies.
   # In both the 6-10 and 8-14 day outlooks, dryness is expected in an arc from Texas into the Southeast. Areas north will mostly see normal precip, with above normal amounts from Wisconsin to the east.  The PNW will be dry as well.  Even longer range outlooks show much of the country warmer than normal except for normal potential in Texas and surrounding states.  Precip will be mostly normal except for Minn. and parts of the Dakotas. 
   # The recent world focus has been on France/Germany, but their flooding continues to recede.  India’s monsoon has been expected to be normal this year, but it’s emergence has been 1-2 weeks behind normal so far, adding to uneasiness about production, mostly for oilseeds and corn.  The Black Sea area is expected to be somewhat warmer, drier, helping ease disease concerns from the mild, moist spring.  Rain in central China has eases some dry weather concerns.  Frosts in southern Brazil may have nipped some late maturing corn, but the impact should be minimal.
   # NOPA will release their May crush report at 11 am.  The trade is looking for a number near 149.7 mln. bu. That would eclipse the May record set just last year. 
   # Wheat harvest is active as far north as southern Kansas and southern Illinois.  HRW yield/quality is reported to be good.
   # Otherwise, technical features will dominate the trade focus, with the industry watching corn most closely as the moment to see what it might do if futures hit new highs, along with the performance should the nearby contract move over $4.50.

***** Cattle should start mixed/higher; lean hogs slightly higher. *****  

   # Wholesale beef closed higher yesterday, which should bring some support to the cash market.  Offering prices are expected to be around $130 live and $210 dressed.  Packers are thought to be short bought which should bolster cash bids.  
   # Wholesale pork is firm, but continues to find a headwall as the cutout nears $90.  Packers are making money.  Hog numbers are tightening a little.  Iowa/Minn weights were down last week, but were still higher than last year.  Hog prices are expected to be $.50-$1.00 higher.