HIGHLIGHTS
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MARKET TREND—Lower: CN, -$.0175; SN, -$.0875; WN, -$.0725; KWN, -$.0650
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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
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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
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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.
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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 $0.28 in 2017. EIA report at 9:30 am CDT
SOYBEANS/WHEAT
· ATI Research: USDA WASDE pegs 18/19 U.S. soybean carryout at 0.385 bbu vs. avg. trade guess of 0.435 bbu; however, next year’s (18/19) South American soybean potential lurks in the background: Brazil, 118.0; Argentina, 56.0
· T-storm Weather: At least 1.00” of rain affected 87% of U.S. soybean crop over 1-week period ending Mon. morning
· ATI Research: USDA cuts Russia wheat crop by 3.5 MMT; any further reduction could lead to a similar drop in exports
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T-storm Weather: Much drier than normal next 7 days for southern ~50% of Russia’s winter wheat, but cool temps
ENERGY
· Weaker: CLN18, -$.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 ;
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Choice boxed beef values were 21-cents lower on Tuesday at $224.92 and are $2.66 lower vs. last week
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ATI Research: USDA Supply/Demand report lower 2018 beef production by 90 mil lbs, but output still up 3.6% v. 2017
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USDA mandatory pork carcass cutout value increases $1.38 on Tuesday to $80.39 and is $2.92 higher v. a week ago
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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