HIGHLIGHTS

• MARKET TREND—Lower: CN, -$.0175; SN, -$.0875; WN, -$.0725; KWN, -$.0650
• MACRO:  Mixed activity in the overseas markets; Wall Street should start higher; Fed rate hike expected at the conclusion of its 2-day meeting, along with indications of future policy direction.  Asia—Weaker: Nikkei, +0.38%; Shanghai, -0.97%; Hang Seng, -1.22%.  EUROPE: Firmer: DAX, +0.23%; FTSE, +0.23%; CAC, +0.30%.  WALL STREET: Futures look positive: DOW, +36; S&P, +4.50; NAS, +15.75. EXTERNALS: July crude: -$0.09 @ $66.27; Aug Gold: -$1.00 @ $1,298; Dec $ Index,+.169 @ 93.100

·       T-storm Weather: A few thunderstorms affect Kansas, the Delta, and the southeast half of the Corn Belt today as a strong system exits.  Mainly dry and hot weather follow for several days starting Thu.-Fri., except in northern areas of the Corn Belt & Plains where thunderstorms produce 0.50"-1.50" Sat.-Sun.  Thunderstorms re-develop next week within the southeast two-thirds of central U.S. (especially within Mon.-Wed.); coverage and amounts will take time to determine, but 0.50"-1.50" remains probable

·       CN, dn $.0175 @ $3.7575; CU, dn $.0150 @ $3.8525.  Friendly report; funds buy back the 30 K they sold on Monday                

• SN, dn $.0875 @ $9.4525; SQ, dn $.0875 @ $9.5075. Funds: Bot 2 SB, 2 SBM; sold 6 SBO.  Board Crush: $1.54 , -$.01; LY: $.84
• WN, dn $.0750 @ $5.27; WU, dn $.0750 @ $5.4250.  Smaller Russian crop; Black Sea weather worries: funds buy 15 K                                        

CORN/SORGHUM

·       ATI Research: USDA raises U.S. 17/18 corn exports 75 mbu to 2.3 bbu; Brazil crop dn 2.0 MMT (85.0) & lower Ukraine exports (-0.5 MMT).  Black Sea 2018 crops continue to merit monitoring & more cuts to Brazil’s corn crop are possible

·       USDA WASDE pegs 18/19 U.S. corn carryout at 1.577 bbu vs. avg. trade guess of 1.642 bbu

·       Consultant: Brazil corn production estimate is unchanged at 81.0 MMT with a lower bias going forward. 

• T-storm Weather: Uncertainty exists, but most probable U.S. corn scenario is for a drier/warmer period June 22-26

·       Ethanol margins: $0.29 per gallon—up vs. $0.28 last week and above $0.28 in 2017.  EIA report at 9:30 am CDT

SOYBEANS/WHEAT

·       ATI Research: USDA WASDE pegs 18/19 U.S. soybean carryout at 0.385 bbu vs. avg. trade guess of 0.435 bbu; however, next year’s (18/19) South American soybean potential lurks in the background: Brazil, 118.0; Argentina, 56.0

·       T-storm Weather: At least 1.00” of rain affected 87% of U.S. soybean crop over 1-week period ending Mon. morning

·       ATI Research: USDA cuts Russia wheat crop by 3.5 MMT; any further reduction could lead to a similar drop in exports

• T-storm Weather: Much drier than normal next 7 days for southern ~50% of Russia’s winter wheat, but cool temps

ENERGY

·       Weaker: CLN18, -$.09 @ $66.27; EBQ, -$.097 @ $76.79; EBQ-QCLQ, +$0.01; RBN,-.0047; NGN, -.005; HON, -.0053

·       EIA Report Estimates (API): crude oil, -1.6 (+0.8); Gasoline, +0.7 (+2.3); Distillates, +0.4 (+2.1).  Estimates for ethanol prod. avg. 1.044 mil barrels/day (range 1.035-1.050).  Avg. est. for ethanol stocks is 21.9 mil barrels (range 21.8-22.1)

·       On Tuesday, cash ethanol markets were mostly higher: Chicago was quoted at $1.42, up $0.0125; Basis to Chicago—New York, +$0.115; Gulf, +$0.0825; Dallas, +$0.105; Tampa, +$0.2275; and LA, +$0.2625 

·       Ethanol RINs were lower on Tuesday: 2017’s fell ¼ to 16-17; and 2018’s eased ¾ to 22-23 ½

·       The July RBOB/July ethanol spread lost $.0330 yesterday; closes at +$.6459/gallon

  LIVESTOCK/POULTRY               ​;                      

• Choice boxed beef values were 21-cents lower on Tuesday at $224.92 and are $2.66 lower vs. last week 
• ATI Research: USDA Supply/Demand report lower 2018 beef production by 90 mil lbs, but output still up 3.6% v. 2017
• USDA mandatory pork carcass cutout value increases $1.38 on Tuesday to $80.39 and is $2.92 higher v. a week ago
• CME Lean Hog Index firms $1.30 on Tuesday to $77.18.  June futures gained $0.375 and are $3.345 above the index

Sources: Bloomberg, Dow Jones, AP, DTN, T-storm Weather