AgriVisor Morning MarketWatch

Wednesday, June 13, 2018
***** Corn fractionally lower ahead of the break; soybeans off 8 to 9 cents; Chicago wheat lower by 6 to 8 1/4. ***** 

   # Tuesday’s crop report out of the way, the grains are back to trading weather.  Favorable conditions in the early going combine with a good looking two-week forecast to put futures on their heels.  Ongoing trade worries also add a degree of bearishness.
   # A break in the selling pressure came about from Tuesday’s Supply and Demand report.  USDA trimmed U.S. carryout estimates for the major grains while also cutting global coarse grains carryout. 
   # USDA cut slightly its outlook for U.S. wheat production, calling for ending stocks to drop by 12 percent this year.  The government analysts pulled back on the Russia’s output estimate, but they are thought to remain too high on current projections for wheat production in Ukraine, Australia, and possibly the EU.
   # Expectations are now being formed for the next crop report day, this one the very important Stocks and Acres release on June 29th. 
   # 24-hour rainfall coverage was widespread and moisture was added to healthy totals already received over last weekend and Monday.  Scattered showers may continue to pop up in the northern Midwest, but most of the Corn Belt should keep dry through the middle part of next week. Temperatures will reach into the middle 90’s this weekend in central Illinois. No change from the 6-10 day outlook leaning warm and wet, but a drier pattern marks the 8-14 day forecast.  
   # Trade war worries are popping up this morning.  President Trump is said to be moving forward on his intention to provide a Friday release of the final list of Chinese goods subject to new tariffs.  The Chinese are reportedly ready to retaliate with tighter trade restrictions of their own.
   # Hedge funds were buyers of an estimated 25,000 contracts of corn on report day, leaving them with a net-long near 80,000 contracts.  The large speculators are thought net-long soybeans by only about 30,000 contracts.  They are net-long of approximately 35,000 contracts of Chicago wheat.
   # Investors are counting on an interest rate hike to come out of today’s Federal Reserve meeting.  Left to question is whether or not the central bankers will decide to shoot for four interest increases instead of the previously-intended three.      

***** Live cattle futures look to open steady/firmer; hogs may enjoy follow-through buying. ***** 

   # Cattle traders are waiting for the cash market to develop after last week showing strength with $115 live being booked.  The showlist is up on the week, but packer margins are still robust and buyers need to finish stocking up for the 4th of July.    
   # Hogs are being marketed at a rapid clip but weights are down to help keep pork stocks from building at an overly burdensome pace.  Cash and wholesale market performance has been strong as of late, but an expected seasonal lull for demand is approaching.