AgriVisor Morning Marketwatch

Thursday, June 16, 2016
   ***Good Morning***

***** Grains are slightly lower to start the day; soybeans 9-10 lower, corn 1 lower, but wheat is 1-2 higher. *****

   # Weather seems to be the biggest news undermining grain markets as the trading day unfolds.  At the same time, there is some talk about world economies slipping which might moderate the recent pace of strong commodity demand. 
   # This week’s rain totals across the Midwest were as good as forecast late last week, and better than the ideas as the week began.  Weather will warm up, dry out into the weekend, but temps are still mostly not expected to get to extremely stressful levels.  And the short term outlooks still include another frontal system for early next week.
   # The 6-10 day outlook now shows heat staying mostly west, encroaching on the western parts of the Plains.  And there’s a tongue of above normal rains from the southern Great Lakes into Nebraska.  Dry conditions are mostly across the Midsouth into Texas.  The 8-14 day outlook has dryness in that same band, with warmth in the Southeast/Midsouth/Great Plains to the west.  Longer range forecasts show warmth in the Midwest, but not discernable dryness.  The Midsouth/Texas high temps could have some negative repercussions. New long range outlooks will be out tomorrow. 
   # India’s monsoon has been expected to be normal this year, but it’s emergence has been 1-2 weeks behind normal so far.  The latest forecasts show it starting to creep northward this weekend.  The Black Sea area is expected to be somewhat warmer, drier, helping ease disease concerns from the mild, moist spring.  But Russian wheat prices are moving upward on quality concerns. And indications out of Parana, Brazil indicate the recent frosts have cut 2nd crop corn output somewhat.
   # Strat Grains left its forecast for EU soft wheat production unch at 146.7 mmt and lowered exports to 29.9 mmt, -0.8 mmt, because of quality concerns.
   # Export sales will guide the early trading today. Corn sales, 1.09 mmt. were at the low end of the range, soybean sales, 1.58 mmt. were slightly better than expected, soymeal sales, 193,000 tons were on the low side of expectations, but wheat sales, 762,900 tons were much better than expected. 
   # Otherwise, technical features will dominate the trade focus, with the break below $11.50 on July soybeans tilting the odds more in the favor it’s short term trend has turned down.  The corn trade will be watching $4.20 on July corn. 
   # The Fed chose not to raise interest rates at this time, but still plan to raise rates 2 times this calendar year.  That caused a lot of volatility in forex markets late yesterday, but seems to be supporting the Dollar this morning.  The read of the Fed members seems to suggest they have become a little less inclined to raise rates.
   # Fear about “Brexit” continues to be a drag on world equity markets, along with eroding economic data in various countries around the world. 

***** Cattle should start slightly lower; lean hogs steady/firm. *****
   # Wholesale beef closed mixed/lower yesterday, undermining the live market.  A light cash trade showed cattle trading slightly lower than last week.  Still, packers are thought to be short bought which should bolster cash bids.  
   # Wholesale pork weakened slightly, continuing 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 steady/firm.