AgriVisor Afternoon MarketWatch

Tuesday, July 05, 2016
***** Corn drops 8 to 9 1/4 cents; soybeans tumble 49 3/4 to 60 1/4; Chicago wheat up 2 1/4 to 3 1/4. *****

   # Rainy weekend weather sparked a sell-off at the start of this shortened holiday week.  Corn and soybean futures gapped lower when the session started at 8:30am central.  Corn managed to bounce off session lows and finish in the top half of the day’s trading range, but soybean losses snowballed quickly and the oilseed never recovered.  
   # Weekend weather was about as good as advertised with 0.5-1.5 inches collected in the Central Plains and up to 2 inches across Missouri and Southern Illinois.  Coverage was minimal in the northern half of the Corn Belt, but the forecast has much of that area on the receiving end of showers mid-week.  
   # Corn ratings held unchanged for another week at 75 percent Good or Excellent, again defying expectations for a one- or two-point drop.  Soybean conditions fell two points to 70 percent G/E. 
   # There was some talk about weakening prospects for global economic growth becoming a headwind for the commodity market.  The Brexit vote fallout continues to be cause for shaky financial markets.  Falling oil and equities and a higher dollar and stronger gold were signs of the risk-off sentiment gripping many markets. 
   # The weekly export inspections was strong enough for corn and wheat at 45.9 and 20.6 million bushels, respectively, but weak for soybeans at 7 million. 
   # Grain markets in China faced pressure at the start of the week as the country’s central bank is expected to ease back on monetary stimulus measures.
   # Gaps from $3.63-$3.65 3/4 and $11.20-$11.36 1/4 now stand as technical resistance to the December corn and November soybean futures contracts, respectively.  New contract lows now leave corn vulnerable to a test of the $3.18 1/4 bottom from October 1st, 2014.  November soybeans will open Wednesday with a test of support from the contract’s 50-day moving average.          

***** Live cattle down $1.05 to $1.85; feeders down $1 to $1.85; hog futures steady to $0.67 higher. ***** 

   # Steady to firmer deals in the wholesale market helped cattle futures turn around and finish with gains for the day.  A wide discount to last week’s cash trade provides futures with underlying support, but traders are not yet ready to make a clear call on direction for cash this week.
   # Hog futures ended up on the losing end of a wide trading range, with technical sellers just edging out buyers encouraged by an improved outlook for cash fundamentals. Traders continue to weigh large production numbers against robust demand performance.