AgriVisor Afternoon MarketWatch

Wednesday, June 06, 2018
***** Corn and soybeans fractionally firmer; Chicago wheat higher by 6 cents. ***** 

   # Soyoil futures struggle to keep up with beans and meal in the face of pressure from a falling Asian palm oil market.  Export demand for the edible oils has turned sluggish while a record soybean crush pace in the U.S. keeps domestic stocks elevated.  
   # President Trump will reportedly review a new trade deal offered by China that includes that country’s promise to increase purchases of U.S. ag products.  Officials from both sides are trying to work out an agreement that would allow the tariffs proposed by the U.S. to be avoided. 
   # President Trump did not reveal a final decision on direction for renewable fuel standards as was expected on Monday or Tuesday.  It was earlier reported that a plan was in place to allow E-15 fuel sales throughout the year.  Ethanol industry leaders support that policy change but they are fighting back against the proposal of allowing RIN credits to be applied on ethanol exports.
   # The 6-10 day outlook turned slightly wetter for the Corn Belt while the 8-14 day is clear in displaying higher chances for rain across the country.  The two-week forecast continues to call for temperatures to run warmer than normal.  
   # Meteorologists are watching the possibility of an El Nino forming this fall.  El Nino follows from warming waters in the equatorial Pacific and can lead to extreme weather conditions, usually wetter for the U.S.
   # Traders are watching wheat for direction as big moves in the market are impacting day-to-day action for corn.  July Chicago futures are at risk of breaking an uptrend that has guided prices higher since the start of April.  The contract is testing chart resistance from its 20-day moving average this morning.  A drop below Monday’s $5.03 1/4 low would be thought likely to bring out additional selling pressure.  
   # The dollar is relaxing back after having displayed notable strength since the start of spring.  European political turmoil has calmed down and market participants are allowing for chance of a NAFTA deal.    

***** Livestock futures poised for a steady/better open in follow up of Tuesdays firmer finishes. ***** 

   # Cattle futures are moving up toward the cash market, which is looking resilient alongside robust packer margins.  August live cattle futures made a strong technical close above the major moving averages on Tuesday and will now look to test last week’s high at $105.20.
   # Hogs reversed higher into Tuesday’s close as some of the pessimism over trade faded.  The market is still vulnerable to talk of retaliatory tariffs against U.S. pork.  Busy marketings and lower weights are turning friendly on the fundamental side.