Wednesday, July 29, 2015 AgriVisor Afternoon Marketwatch

Wednesday, July 29, 2015

***** Corn drops 7 to 7 1/2 cents on the day; soybeans up 3 in the front, down 1 1/2 to 2 1/4 from Nov to March; Chicago wheat tumbles 14 1/2 to 15.  

   The weekly ethanol report had corn usage dropping for the third straight week.  Grind was 101.3 million bushels, ahead of the 99.5 million now needed to meet the USDA demand target.  Ethanol production dropped nearly one percent while stocks built by a half percent over the previous week. 

   Pervading export worries weigh on grain prices.  Shipments are running behind relative to the USDA-set pace.  New-crop sales have not been strong this summer.  Bumper crops in South America, a firm dollar, and a softening Chinese economy are notable headwinds for the U.S. grain export programs.

   Funds were thought to be light sellers of corn, light buyers of soybeans by midday.  Managed money’s bullish grains position is contrary to the market move and makes for a pivotal week. 

   An ‘outside day’ on the charts was bearish for corn futures.  The most-active December contract is near-term oversold with a settlement that remains below the bottom Bollinger Band.  Key resistance lies above the market, where major moving averages hover near the gap opened on Monday. 

   Various bits of economic data guided other financial markets on Wednesday.  The federal funds rate was left unchanged after this week’s FOMC meeting.  Pending home sales growth was a negative 1.8 percent on the month and behind expectations, but it was up 8.2 percent year-on-year.  Second quarter GDP will be reported on Thursday morning, with the consensus estimate looking for an annualized rate of 2.7 percent.  Jobless claims data will also be published.  

***** Hogs gain $0.45 to $1.05 on Wednesday afternoon; live cattle trade moderately lower, feeders fractionally higher.   

   Cattle started the session higher, building off of momentum from Tuesday, but futures fell back toward midday.  Wholesale beef prices were climbing slightly to help out the bulls as they attempted to spark a rebound on the board.  Even so, futures are likely to wait for guidance from a cash trade that has not yet developed this week.

   Hog futures gapped higher to capitalize on bullish momentum gained on Tuesday.  The most-active October contract is working to clear resistance from highs achieved earlier in the month.