AgriVisor Morning MarketWatch

Thursday, June 30, 2016
***** Corn fractionally firmer at the break; soybeans up 3 to 3 1/2; Chicago what higher by 2 to 2 3/4. *****

   # Grains trade quietly higher on light volume.  A favorable weather forecast leans market-negative, but today’s focus is on the Stocks and Acreage reports.
   # The Quarterly Stocks and June 30 Acreage reports will be issued at 11:00 central.  Analysts guess, on average, that corn stocks will have totaled 4.54 billion bushels as of June 1, soybeans 829 million bushels.  Corn and soybean stocks held at this time last year were 4.45 billion and 627 million bushels, respectively.  A rough consensus has corn acres dropping by about one million and soybean area up 1.5 million.  
   # A negative report reaction would potentially have December corn futures test technical support at $3.75 (May low) and $3.64 (contract low).  A move up could contend with resistance from the 200-day moving average at $3.95; above that, $4.06 3/4.
   # November soybeans may find technical support from a cluster of May highs around $10.75.  38/50/62 retracement points sit at $10.65, $10.27, and $9.88.  $11.86 1/4 is the contract’s one-year high.  
   # Fund traders head into the report holding long grain positions.  There has been some liquidation and a few new sellers to enter the mix for corn, but the fund net-long remains above 175,000 contracts.  Money managers still maintain a net soybean long of about 200,000 contracts.  Still short about 75,000 wheat.     
   # The export sales report featured soybean tallies that were as good as expected with about 50 million bushels split evenly between 2015/16 and 2016/17 marketing years.  New corn sales were on the weak side for 2015/16 at 18.5 million bushels but strong for the 2016/17 book at 21 million.  Wheat sales of 23.7 million beat the top end of the estimate range.
   # Scattered showers fell across Iowa and northern Missouri on Wednesday.  Rain is expected for much of the Western Corn Belt today.  Wet weather should reach into the Eastern Corn Belt by the end of the weekend.  
   # The two-week map has temperatures running warmer than average, but there is a better chance that precipitation will be above normal as well.  Traders are most eager to see how updated forecasts for the last half of July turn out after expectations for hot, dry conditions formed recently. 

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

   # A more positive outlook has developed for this week’s cash cattle market despite wholesale weakness.  Slaughters run a touch lower than a week ago, slightly smaller than a year ago.  There is some uncertainty over demand prospects now that the 4th of July holiday is nearly behind us.          
   # There is not as much bullish enthusiasm to define the hog trade after last week’s report deflated some of the optimism.  A turn lower for pork prices has kept futures on the defensive going into the second half of this week.  Still, hog futures remain elevated and show gains for the month.