Tuesday, August 11, 2015 AgriVisor Afternoon Marketwatch

Tuesday, August 11, 2015
***** Corn futures tumble 13 to 13 3/4 cents; soybeans off 20 to 30; Chicago wheat down 17 to 18 1/4. *****

   Grains gave back most of Monday's rally as market sentiment turned risk-off because of China's yuan devaluation. The bears were aided by crop condition ratings that held up better than expected. Volatility continues into Wednesday with USDA's Crop Production and WASDE reports. 
   Report estimates have been traded this week. Analysts look for yield to come in near 164.5 bushels per acre for corn, 44.7 for soybeans, versus USDA's July forecasts of 166.8 and 46, respectively. USDA will start with a clean sheet on this report, using data from producer surveys and enumerator scouting to judge yield.
   Crop production estimates for Brazil could increase on report day. The country's crop agency, Conab, increased its corn output projection to 84.3 million metric tons versus the July USDA guess of 82 million. European corn production is likely to come down after heat stress has taken the top end off of yield potential. That heat is also moving into the Ukraine and threating the corn crop there. 
   Even though corn and soybeans dropped hard, futures still finished with an 'inside day.' Monday's highs and lows now become key technical points. September corn was unable to fill an important gap down that opened at $3.92 while November soybeans have a gap up that is open. Soybean futures still hold support from the major moving averages. 
   Oil prices made new lows on news that OPEC production hit a three-year high in June. New oil hitting the export market from Iran adds to the global supply glut. The Chinese yuan devaluation added to the bearishness, as a weaker currency will alter terms of trade and pressure import demand. 

***** Hogs down $0.375 to up $0.625; live cattle down $0.175 to $0.30 with feeders steady on the day. *****

   Cattle futures were steady throughout the day during a very quiet trade. No trend has developed in the cash market, where $150 to $153 live remains the benchmark. 
   August hog futures climbed closer toward the cash value as the October contract dropped moderately. Lower wholesale pork prices were a headwind. Packer margins are still strong enough to firmer bids in the direct market.