AgriVisor Morning MarketWatch

Monday, July 11, 2016
***** Corn up 3 1/2 to 4 cents; soybeans higher by 9 to 14; Chicago wheat up 5 to 6. *****

   # Grains trade higher on good volume at the start of the new week.  Buyers are winning out on the idea that weather will be shifting way from favorable for crops.    
   # Weekend rains were heaviest in Minnesota and the Dakotas.  The Corn Belt’s mid-section was mostly dry while 0.5–1.5 inches fell over a wide swath of the Mid-South.  
   # Storms linger in the upper Midwest today.  Sunday’s run of the U.S. weather maps have the Midwest leaning hot and dry over the next two weeks.  Some forecasters continue to suggest that conditions will remain hot and dry through the latter half of the growing season.
   # Hedge funds cut 50,000 longs while adding 21,000 shorts to leave their corn position still bullish by just more than 100,000 contracts.  Funds are now net-short by more than 100,000 contracts of Chicago wheat.   The managed money soybean net-long dropped to 167,000 contracts through last Tuesday. 
   # Traders expect to see crop condition ratings catch up with the beneficial rains that fell over the July 4th holiday weekend.  A slight improvement can be seen in the combined Good/Excellent ratings that ran 75 percent for corn and 70 percent for soybeans. 
   # A note from Citi bank expressed a bullish view on commodity market potential for 2017.  The analysts see strengthening oil and other energy commodities leading the way for the rest.
   # A small rebound was made for grain futures in China.  Monday’s session on the Dalian exchange had soybean futures close higher by 1.2 percent, corn up by about the same.  Last week’s China sell-off, particularly for soymeal, was a slight drag on the U.S. market.    
   # December corn futures gapped up at the start of the overnight session and move up enough to close the down-gap that had been opened at the start of last week.  Just ahead is the contract’s 10-day moving average, with more formidable resistance not coming into play before $3.75. 
   # The major U.S. equity indexes approach all-time highs as fear produced from the Brexit vote fades.  Victories for the Japanese Prime Minister’s party helped rally the Asian markets at the start of the new week.        

***** August live cattle open with a test of resistance from the 20-day MA; hogs futures face pressure from weak, but oversold, technicals. ***** 

   # Cattle futures are fighting bearish supply counts and tepid demand.  A weak wholesale trade pressured cash deals lower by a couple dollars at the end of last week. 
   # The fund traders have been seen ditching longs that had been held on hog futures for some time.  Exports remain a bright spot for the market, but the domestic market remains saturated and pork places plenty of competition from the rest of the meats.