One Eye On The Radar The Other on Brexit
Jun 20, 2016
Good Morning! Paul Georgy with the early morning commentary for June 20, 2016.
Grain markets are lower on weather and profit taking. Outside markets are adjusting before UK vote on Thursday. Latest polls suggest UK stays in European Union.
The week ahead will spread moisture across much of the Midwest. However, trade is looking past this week into the 6 to 10-day period where more weather models are in disagreement.
Crop conditions report will be released at 3:00 pm today. Trade is expecting the good to excellent to be down 1 to 2% in corn and soybeans from the 75% and 65% respectively.
The Buenos Aires Grain Exchange is reporting the Argentina soybean crop harvest is 91.4% done while corn harvest is 35% complete.
Argentina's corn acreage could increase 20 percent during the 2016-17 growing season, raising production by another 10 million and 15 million tonnes, says the countries ag minister.
Managed money funds were aggressive buyers in corn as reported on the CFTC Commitment of Traders report on Friday. The report showed managed funds bought 44,328 contracts making them net long 252,295. They reduced long positions in soybeans by 2,963 remaining long 207,088 contracts. Managed money funds reduced short positions in wheat by 5,085 to 48,235.
Funds were estimated to have been net buyers on Friday of 17,500 corn contracts, 13,000 soybeans, 5,000 wheat, 7,000 soymeal and 6,000 soyoil contracts.
Brexit vote is on Thursday in the United Kingdom with results expected on Friday. Latest polls are leaning toward a UK staying with EU. Exchanges have increased margin requirements for several currency and metals contracts as we approach the vote results.
Technical and outside market attitude will impact livestock futures early this week. Cattle futures are suggesting an oversold condition while lean hogs are overbought. August cattle contract is testing chart support which is contracts lows. July lean hog resistance crosses at contract highs near the 89.00 level.
Funds were net buyers in hogs and cattle last week.
Dressed beef values were lower with choice down 1.65 and select down 3.14. The CME Feeder Index is 144.01. Pork cutout values are up .62.
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