AgriVisor Morning MarketWatch

Tuesday, June 28, 2016
***** Corn up 9 to 10; soybeans higher by 22 to 26; Chicago wheat firmer by 6 to 7 1/2. *****

   # Grains benefit from re-stabilization in outside markets.  Oil and equities being up, the dollar down is a supportive influence for the commodity space.  
   # December corn futures are trading above the psychologically-important $4 mark, as well as over both the 100- and 200-day moving averages.  Just ahead, the contract’s 50-day moving average is rising toward a retracement target at $4.07 3/4 that will serve as resistance.
   # The Good/Excellent rating stuck at 75 percent for the corn crop at the end of last week.  Most had expected to see a one- or two-point drop.  72 percent of the soybean crop is tagged G/E versus 73 percent last year and 63 a year ago.  Corn silk is estimated at 6 percent, soybean bloom at 9 percent.
   # The Crop Progress report included a look at topsoil moisture conditions, which found 31 percent of the country’s cropland Short or Very Short of normal levels.  The averages include conditions observed in the drought-stricken West, like in California where 70 percent of land is S/VS.   
   # Rain fell over the Missouri Bootheel and into most of the Mid-South on Monday.  Showers also popped up in part of the dry southeast region of Illinois.  
   # The two-week maps lean cooler and wetter, but there is increasing trader chatter about conditions turning hot and dry again late July.  La Nina is still talked about as a potential crop threat for late summer.  
   # After doing little to alter the net position in the previous week, fund traders have been seen adding to their bullish soybean bets late in the current reporting week.  Money managers hold a bigger corn long than would have been expected after last week’s market tumble, now something just north of 200,000 contracts net. 
   # There is a feeling that grains continue to trade on Brexit influences and weather while not yet featuring an active effort on the part of speculators to position themselves for this week’s crop reports.  Quarterly Stocks and Acreage reports will be issued at 11:00 central Thursday. 
   # Of the many questions left in the wake of the Brexit vote:  Will the ECB push monetary stimulus further?  Will the U.S. Fed keep rates low longer?  Who will replace outgoing U.K. Prime Minister David Cameron?  Will Scotland vote to leave the U.K.?  Will others choose to leave the EU?  How will global growth fare after the U.K.-EU breakup? 

***** Cattle futures look to enjoy follow-through buying as hogs may find pressure from the opposite.​ *****

   # There is some tentative optimism for the cash cattle market developing early in the week.  Showlists are smaller this week.  Wholesale beef is on the defensive to create some hesitance.  August futures posted an inside day on Monday and will have Friday’s high at $113.27 to contend with.       
   # Friday’s Hogs and Pigs report leaned on futures at the start of the week and brought the board better in line with the cash market.  August hogs are close to an important test of support at $82.75, where the 50-day moving average is currently intersecting at 38 percent retracement target.