AgriVisor Morning MarketWatch

Thursday, June 23, 2016
***** Corn down another nickel ahead of the break; soybeans off 6 to 8; Chicago wheat up fractionally. *****

   # Weather remains the influence that has grains on the defensive with rain this week adding to a cooler forecast for the first half of July.  Grains currently ignore supportive outside markets.  
   # Corn export sales were strong but not outstanding this week.  New commitments for 2015/16 totaled 870,700 tons, which was about the average trade guess.  Sales for 2016/17 were better than expected at 550,300 tons.  The numbers for soybeans were fully anticipated at 660,000 tons apiece for both 2015/16 and 2016/17 books.    
   # This week’s tumble leaves corn futures short-term oversold with the nearby futures currently trading under its lower Bollinger Band.  Just below the market for July corn is the 100-day moving average, which the contract has not settled under since early March.  
   # Severe thunderstorms rolled through the Eastern Corn Belt last night to leave 2 inches of rain for many in northern Illinois and most of Indiana and Ohio.  Tornadoes were spotted in northern Illinois throughout the evening.
   # The 6-10 day outlook suggests a cool-down is in store for the Midwest.  Precipitation chances are lower for the Corn Belt, higher for the Mid-South over the next two weeks.  
   # There is disagreement on how much corn has been sold by the fund trader so far this week, giving the Friday afternoon CFTC Commitments of Traders report even greater importance.  The consensus estimate has managed money net-long still by 190,000 contracts.
   # U.S. officials in Brazil have estimated that Brazil’s corn crop will total 75 million metric tons versus the estimate of 77.5 million from headquarters.  
   # Outside financial markets are active ahead of today’s Brexit vote.  Equity index futures are up sharply and the dollar index down as traders price in less risk of a win by the ‘leave’ side.  

***** Cattle futures likely to start steady to fractionally firmer; August hogs open with a test technical support from their 20-day moving average.​ *****

   # June cattle futures are in the process of converging with the cash market, which started trading yesterday at $116.  Live sales at $116 would currently leave the next-up August contract with slightly less than a $5 discount.  One can imagine that the market structure may look different after Friday’s trio of Cattle on Feed, Hogs and Pigs, and Cold Storage reports.  
   # Hog futures are taking on a defensive tone into the end of the week as traders pare some risk ahead of the Hogs and Pigs report due out Friday afternoon.  Analysts expect to see a small expansion in the ‘all hogs and pigs’ count with an average guess of +0.7 percent.  The breeding number is expected at 100.4 percent, marketing 100.7.  

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