Thursday, July 30, 2015 AgriVisor Afternoon Marketwatch

Thursday, July 30, 2015
***** Corn gains 5 1/2 cents; soybeans up 6 1/2 to 7 1/2; Sep Chicago wheat up 1/4 cent as the deferred months settle fractionally weaker. *****
   It was not an overly-bullish day for grains technically, but an up-day is certainly more positive than the alternative. December corn held above the lower Bollinger Band and settled over its daily pivot. The 50- and 100-day moving averages have converged overhead and provide resistance. November soybeans were turned away from their major moving averages and could not post a close above Wednesday's high. 
   The export sales report was mixed for the grains: short of expectations for corn, solid for wheat, strong for soybeans. Corn sales for the current marketing year were up on the week at 14.4 million bushels and surpassed the USDA target of 1.85 billion bushels. Shipments for 2014/15 and sales for the next marketing year are lagging. Old-crop soybean sales were 15.3 million bushels versus some analysts' expectations for a net reduction. New-crop sales were 33 million bushels. The majority of the soybean tallies were booked by China. 
   Chinese economy worries remain a headwind for the export outlook. Traders have viewed Chinese stock market weakness as confirmation of a softening economy. Rumors have resurfaced about letter of credit troubles. Nonetheless, there is reason to suggest that the current worries are overblown and not likely to have a material impact on Chinese demand for grain imports. What will be watched more closely in the coming months is competition for Chinese demand from South American exporters. 
   Oil prices reversed lower from a strong start to the session. Initial bullishness was had in part on reports that Saudi Arabia would cut production later this summer to respond to the expected seasonal demand downturn. A disappointing second quarter U.S. GDP number tempered some of the enthusiasm. There were additional reports today of oil companies looking to cut costs in order to weather what they expect will be long-term price weakness. 
   A firm dollar does not help oil prices or the commodity space as a whole. The dollar was broadly stronger after a host of economic input. This second quarter GDP number mixed expectations, but the first quarter estimate was revised to a 0.6 percent gain versus the previous report of a 0.2 percent contraction. Consumer spending data were positive. Traders also digested a policy statement from the Fed that indicated optimism over labor market progress but worry about low inflation. 

***** Hogs finished fractionally lower on the day; live cattle up $0.475 in the front, down moderately beyond December; feeders fall $0.35 to $0.55. *****

   Hog traders are taking profits on this week's run up. Futures are running into technical resistance from their 50-day moving average. Pork prices were dropping moderately on Thursday and also encouraged the liquidation. 
   Cattle futures were mostly quiet on Thursday with some light bull spreading being notable. The bulls have renewed optimism now that wholesale beef values look to be bottoming. Negotiated sales have been made in light volumes near $146, but bids and offers mostly still range from $143 to $148 for a market that will not fully develop until Friday.