HIGHLIGHTS
· MARKET TREND-Higher: CN, +2 ¼; CK, +2 ¼; SN, +5 ¼; SK, +5 ¼; WN, +2; WK, NA; KWN, +1/4; KWK, +3
· MACRO: Markets looking for direction. ASIA: Mixed: Nikkei up .1%; Shanghia rises .2%; Hang Seng falls .9%. EUROPE: Definitely weaker on banking sector concerns: CAC 40 off 1%; the DAX is down .76% and the FTSE is .18% weaker. U.S. PRE-MARKETS: Lower. DOW futures, -57; S&P, -5 ½; NAS, -10 ½. EXTERNALS: Gold, +$10.60; $ Index, -.207 @ 94.145 with June WTI $0.15 higher @ $44.81
· T-storm Weather: There are no changes to the Outlook from yesterday. A large system passes through Wed.-Thu., producing areas of rain and t-storms; highest coverage and amounts in the Corn Belt. A sharply cooler pattern follows across a large area, but areas of rain and t-storms recur in southern areas as waves of energy ride the edge of coolness. The cooler scenario will be on the defensive as the week progresses, pulling milder and muggier air northward. This will in turn,set up a clash zone for renewed t-storms in at least central and southern areas. In Brazil, the drought worsens for much of the corn crop
· CN, Up $.0225 @ $3.8325; CK, Up $.0250 @ $3.81. Huge buying 25 K . Deliveries, 73 Corn; 0 ETOH
· SN, Up $.0525 @ $10.8925; SK, Up $.0525 @ $10.8150. Big buying: 30 K SB; 20 K SBM; 9 SBO. Dely: SBO-202; SB-102
· WN, Up $.0225 @$4.635025; WK, Na. Modest fund buying of 4 K. Dely: 4 HRW; 22 SRW
CORN/SORGHUM ;      
· May WASDE: Higher exports cut ending stocks to 1.803 bbu, below the average trade guess of 1.834 bbu;
· Less old crop export competition—USDA scales Argentina production back 1 MMT and Brazil, 3 MMT
· But, booming export demand; higher feed/residual and ethanol grind pull ending stocks down to 2.15 (trade: 2.256)
· USDA 16/17 corn production forecast of 14.43 bbu exceeds trade average by nearly 250 mbu
SOYBEANS/WHEAT
· Conab lowered its Brazil crop estimate 2.1 MMT to 96.9. USDA trims S AM 15/16 production 3 ½ MMT
· USDA slices ending soybean stocks—15/16 fall 45 million to 400; versus the trade average, estimate for 16/17 plummets 107 mbu to 305 mbu
· Global wheat stocks ample as 16/17 expected to reach a 17-year high, up 14.4 MMT to 257 million; 36.1% stx/use
· It’s been a while: SX16 close at $10.67 ½ highest since $10.72 ¾ reached back on July 29, 2014
· Trade narrowly misses USDA SB production estimate with the average only 6 mbu below the 3.8 bbu WASDE #
· In 13 of the past 16 years, final SB c/o has been below the initial forecast 13 times, by an average of 121 mbu
· China bean demand insatiable—USDA expects 4 MMT import increase in 16/17—despite lower corn prices
· 180 degree flip on global 15/16 sb c/o—April, up 1.3 MMT; May, down 3.8 MMT—Lower S Am crop, better demand
ENERGY
· Firmer: CLM16,+$0.15, $44.81; EBN, +$0.28; EBN-CLM, +$1.15, +$0.29; RBM, +$.0075; NGM, +0.0063; HOM, +$.0101
· Cash ethanol markets were steady to higher: the Gulf was up 2 ½; NY gained 2 cents; both Dallas and LA were $.01 higher; Tampa held steady at $1.68 and Chicago posted a 1 ¾ cent increase to $1.5050
· Ethanol RINs slightly firmer: 2014’s up ¾’s at 74 1/2 - 75; 2015’s up 3/8’s at 74 ½ -75; and 2016’s up ½ to 74 ½- 74 ¾
· The June RBOB/June Ethanol inverse eased $.0120 to to -$.04130/gallonyesterday
<strong> LIVESTOCK/POULTRY  
· Choice boxed beef values increased $3.13 on Tuesday and are up $4.76 compared to a week ago
· Cash cattle trading has yet to develop. Feedyards are asking $132 to $134 in the south and $205 plus in the North
· USDA mandatory pork carcass cutout value was $0.42 higher on Tue. at $82.21 and is $0.55 vs. a week ago
· CME Lean Hog Index firmed $0.38 on Tue. to $75.12. May futures increased $0.60 and are $1.58 above the index
Sources: Bloomberg, Dow Jones, AP, T-storm Weather