AgriVisor Morning MarketWatch

Thursday, June 14, 2018
***** Corn futures down 5 1/2 cents ahead of the break; soybeans off 3 to 3 1/2; Chicago wheat off 9 to 10. *****

   # More of the same for grains this morning with trade worries pressuring the market.  President Trump is slated to meet with economic team today to discuss Chinese tariffs that look likely to be implemented.  Left to question are which and how many goods will be included on the final list of tariff targets. 
   # China will be expected to issue retaliatory tariffs if the White House moves forward with new taxes on Chinese goods.  U.S. soybeans are feared to be in China’s crosshairs, but it will be tough for the top-importer to satisfy its consumption needs without the U.S. market.  China would rely more heavily on Brazil, but Brazil cannot supply China alone.  Brazil is expected to have produced 118 million tons of soybeans this season, but the domestic market will eat up about 47 mt of that total.  China is expected to import more than 100 mt this year.   
   # It was another strong export report for corn this week, with 936,400 tons added to the old-crop book.  Soybean sales were also solid at 519,600 tons for the old-crop and 291,000 for the new.  Wheat sales totaled 302,300 tons.
   # The closely-watched analysts at Informa issued their latest estimates for U.S. corn acreage, calling corn plantings 88.7 and soybeans 89.9 million acres, compared to USDA at 88 and 89 million, respectively.  
   # Hard red wheat harvest is underway in the Southern Plains.  Yields took a hit due to drought this season, but weights and protein content are still coming in better than expected so far.
   # It looks like mostly clear skies for the Midwest over the next 5 days with rain back in the forecast during the 6-10 day outlook period.  The 8-14 day is split drier in the NW Corn Belt and wetter in the Southeast.  Temperatures are expected to run hot throughout the remainder of the month.      
   # WTI crude futures are building on small gains from Wednesday after the inventory report showed domestic oil stock falling by 4.1 million barrels last week. Also friendly the market are production and export problems in Venezuela and Iran.  
   # Investors will digest economic reports on business inventories, jobless claims, and retail sales today.  Outside markets are also still working to price in the outcome of this week’s Federal Open Market Committee meeting.  The Fed raised interest rates, as expected, but they also added another rate hike to the intended schedule for this year.    
***** Live cattle futures down $0.25 to $0.60 on Wednesday; feeders off $0.15 to $0.87; hogs rally $0.65 to $2.12. *****

   # More of the same for cattle, too.  A discount to the cash market would continue to support the board, but only if the cash trade can keep from moving lower under the weight of increasing supplies of market-ready cattle.   
   # Hogs were helped by higher cash prices Wednesday.  Slaughters are high but weights are low enough to keep production gains limited.  Domestic demand is faring well into summer but exports have turned somewhat sluggish lately.