AgriVisor Afternoon MarketWatch

Thursday, June 23, 2016
***** Corn down 5 to 6 1/4 cents; soybeans off 13 to 15 1/4; Chicago wheat lower by 4 1/2 to 7 3/4. *****

   # July corn futures settled on top of their 200-day moving average on a close that left the contract outside of its lower Bollinger Band.  This week’s move down will have completed a 62 percent retracement of the entire spring rally.  
   # Today’s export additions put cumulative corn sales above the USDA’s marketing year target.  The weekly total was near the top end of analysts’ estimates, but it failed to absorb any market pessimism.  
   # A strong start to harvest in Russia has analysts expecting a historically-large wheat crop.  Weather has been favorable throughout much of the growing season with only a few instances of winterkill worries to be remembered. 
   # Friday’s Cattle on Feed report could have something to positive to say for the corn demand outlook.  Analysts expect that the number cattle placed on feed in May will be up 9 percent on the year.  Corn will still have to battle with cheap feed wheat going forward.  
   # Weather-related market influences have become more short-term minded and less inclusive of worries about El Nino/La Nina.  In an update made this week, Australian meteorologist left the La Nina tracker in ‘Watch’ mode, indicating that the likelihood of its development in the second half of 2016 is 50-50.  
   # Gulf soybean basis has been improving as export demand picks up.  Buyers have looked to the U.S. as Brazil’s surpluses shrink and Argentina runs late in harvesting a smaller crop.  China is expected to remain an active buyer while processors there enjoy better crush margins.      
   # Observers in the U.S. will learn late this evening the results of Britain’s vote on staying in the European Union or leaving.  Traders would expect a leave win to spark a risk-off event in global markets that could feature a higher dollar and lower commodities.
   # “Emergency actions” have been taken by the CME and CBOT to prepare for an expected increase in volatility that might follow the Brexit vote.  Special Price Fluctuation Limits will be expanded for currency and interest rate products.   

***** Live cattle up $1.40 to $2.22; feeders higher by $1.77 to $2.20; hogs down 0.20 to $0.50. *****

   # Cattle futures worked further to converge with a cash market that has traded $116/$117 so far this week.  Boxed beef was flat after a stronger Wednesday.  A bounce out of oversold territory brings August live futures up for a test of the 20-day moving average.  
   # Hog futures recovered a good portion of the day’s losses into the close but held a weaker tone throughout the day on follow-through selling and weaker pork prices.  Direct hogs in the Western Corn Belt were $0.44 lower on the midday report. 

Have questions about this i​nsight? Contact us or call 1.800.676.5799