AgriVisor Afternoon MarketWatch

Tuesday, June 06, 2017
***** Corn futures gain 3 1/4 to 4 1/4 cents; soybeans up 1 1/2 to 3 3/4; Chicago wheat higher by 6 1/4 to 7 1/4. ***** 

   # Wheat is the leader as crop conditions deteriorate in the West.  More will be known about winter crop potential as harvest kicks off in Kansas.  Drought spreading in the Northern Plains is an early threat to spring wheat. Minneapolis wheat futures are up nearly 10 percent from May lows due to the condition concerns.  
   # The weather outlook for the next 10 days is biased hot and dry for most of the Corn Belt.  Light rains could scatter about throughout the lower Plains and lower Midwest by the end of the week.  Winds picking up in the Northern Plains over the weekend may add to crop stress there.      
   # Farmers were finding some of their old-crop corn offers triggered on today’s move.  Sales of the 2016 crop are thought to be reaching 75 percent on average, still behind the 85-90 percent usually marketed by this time in the season. 
   # Basis values are likely to face further pressure if old-crop corn continues to move.  Yesterday’s central Illinois basis average was reported at 23 cents under July corn futures. 
   # Department of Commerce Secretary Wilbur Ross extended talks over Mexican sugar totals for another 24 hours.  Sugar trade talk kicks off what promises to be a contentious re-negotiation of NAFTA.  Mexico is already said to be reaching into South America for corn as concerns over future trade barriers with the U.S. build.
   # Brazil’s electoral court is reviewing the legitimacy of Michel Temer’s presidency due to allegations of improper use of campaign funds.  Political turmoil keeps the Brazilian real pressured in a way that encourages a steady flow of grain sales throughout the country.      
   # Fund traders were busy covering shorts after having last week built a bearish bet on the grains and soy that exceeded 450,000 contracts on the net.  New-crop weather risk is triggering the risk paring. 
   # The major stock indices were mostly flat as gains for the raw materials producers were offset by weakness for consumer service companies.  Investors may be content to stay on the sidelines until Thursday’s interest rate decision is announced.    

***** Live cattle drop $1.90 to $2.60; feeders down the $4.50 limit; hogs up $0.92 to $0.95. ***** 

   # Cattle futures were higher before short-covering dried up.  Feeders faced a substantial selling push that put them limit down into the close.  Boxed beef prices were higher again on the day, but traders reason they are not likely to move much higher before running into serious pushback from the consumer.                            
   # Hog traders bought the dip and put an end to a three-session slide.  General demand optimism remains while pork prices favorably to beef at the grocery store.  Exporters are shipping pork at a solid pace and expect sales to improve.