AgriVisor Morning MarketWatch

Wednesday, June 07, 2017
***** Corn futures up 3 1/2 ahead of the break; soybeans higher by 6 to 6 1/2; Chicago wheat up 4. ***** 

   # Corn futures reach out above key resistance at $3.80 and the charts begin to lean decidedly positive.  Poor crop conditions also help to spook the bearish fund trader.
   # A settlement above $3.80 for July corn would cement short-run technical strength.  $3.93 3/4 is one of only a few points of possible pushback before key resistance at $4.00 is reached.    
   # Drought conditions are expanding outward from the central border of the Dakotas.  The new spring wheat crop is starting out with a challenge and just-planted row crops do not fare much better.  The next potential rain event for the region comes Sunday/Monday and possibly next Wednesday.  
   # Tuesday’s run of the 6-10 day outlook included some higher precipitation probabilities for the Midwest.  The odds for rain are higher in the far northern and southern stretches of the region.  A two-week warm up is expected to follow after today.  
   # Thursday’s export sales report will help give an indication of U.S. competitiveness in the global corn trade.  The export pipeline is filling with Argentina’s harvest and a record haul in Brazil is not far behind.  
   # Friday is report day.  The World Agricultural Supply and Demand Estimates update will be issued at 11:00 am central.  Analysts expect to see small reductions to U.S. old-crop ending stocks, not much change on the 2017 U.S. balance sheets, and higher estimates for 2016 production in South America.
   # The dollar index bounced after putting in another fresh six-month low this morning.  Geopolitical attentions seem to be oscillating back and forth between the U.S. and Europe.  The U.S. side of the trade will guide the dollar index this week as trader position themselves ahead and eventually react to Thursday’s Fed decision on interest rates.   

***** Cattle futures likely to face follow-through pressure at the start; hogs may tag along lower. *****

   # Short-covering in the cattle market dried up by midday Tuesday and futures dived into the close.  Traders are not confident that boxed beef prices can continue to climb now that they have approached levels that should start to make consumers rotate toward the other meats.                             
   # Pork prices have benefited from the beef strength and the former red meat should enjoy strong demand during the upcoming Father’s Day and July 4th holidays.  Futures upside may be limited in the short-run by traders wanting to take profit near old highs.