Midwest Expected To Dry Out This Week

(Inside Futures) – Good Morning! Paul Georgy with the early morning commentary for June 6, 2016.

Grain markets are higher as the weather forecast has several days of drying across the Midwest. Outside markets are higher as investors have risk-on attitude. Stock indices, crude oil and the US Dollar are all higher to start the week.

Weather this week ahead of the USDA report should be dry and keep the bullish fire fueled. However, the dry weather will allow for planting progress and maturation of growing crops. Rain should move into the Midwest next week helping crop conditions.

Trade is expecting soybean plantings to be approximately 85 to 87% complete compared to 80% average. Soybean crop conditions report is expected to be 73% good/excellent compared to 69% last year.

Corn crop rating is expected to slightly better than last week as trade is looking for a 72 to 73% good/excellent.

Visiting with wheat growers in southern Illinois this past weekend, their biggest concern is quality of the crop. The wheat looks good but the heavy rains and continuous wet weather they have seen could be a problem fortest weight and disease. Producers near St Louis are expecting to start harvesting around the 20^thof June.

On Friday funds were estimated to have been net buyers of 6,000 corn contracts and 8,500 wheat contracts. They were net sellers of 12,000 soybeans and 4,500 soymeal contracts while buying 1,000 soyoil.

The weekly commitment of traders reports showed managed money funds were net buyers of 66,102 contracts of corn making them net long 130,798 contracts. The added 6,523 contracts to their already long position in soybeans and increased their net short positions by 1,355 contracts in wheat to 90,991 contracts.

USDA June WASDE crop production will be released on Friday.

Macro markets will be watching and listen to Fed Chairman Janet Yellen who will speak at a World Affairs Council of Philadelphia luncheon event later today. Chinese have a busy economic calendar this week while the EU will remain focused on the Brexit vote later this month.

Cash cattle trade last week was $3.00 higher than the previous week while trade was expecting steady to higher trade. Last week total production was estimated at 520,000 which was 1% less than Memorial Day week a year ago. The question cattle traders have to deal with is: Was the extra slaughter during May enough to pull cattle ahead and create tighter supplies during June? Seasonally June is typically the largest production of the year.

Cattle futures rallied to test long-term down trend line on Friday while closing near lower end of trading range. Technical resistance in August cattle futures is 118.70 and support is 116.60.

Lean hog futures are getting buying enthusiasm from outside money flow. Long-term resistance crosses on the monthly charts near 85.50.

Dressed beef values were mixed with choice down .67 and down 3.05. The CME Feeder Index is 147.21. Pork cutout values are down .45.