Wednesday, August 12, 2015 AgriVisor Morning Marketwatch

Wednesday, August 12, 2015
***** Corn futures up moderately ahead of the morning break; soybeans down 2 to 3 1/4 cents; Chicago wheat higher by 2 3/4 to 3 1/2. *****
   Grains back and forth overnight: Corn and wheat trade moderately firmer as soybeans hang back during the tail end of a choppy overnight session. Ranges are six cents for corn, 18 for soybeans and four for Chicago wheat. 
   Traders taking one last look at positions ahead of the report: Managed money was a big buyer of the grains on Monday, large seller on Tuesday. After making substantial cuts to their net-long positions last week, bullish fund traders still have firepower to work with heading into today's report. 
   Yield estimates likely to garner first look on today's report: The trade is looking for the USDA to drop corn yield from 166.8 bushels per acres to 164.5 with the soybean yield coming down from 46 to 45.4. There is a wide range of estimates for the acreage numbers. Analysts have harvested area coming in at 81.02 million acres for corn and 83.3 for soybeans. 
   China surprises with another substantial cut to the currency peg rate: The yuan was further devalued on Wednesday after Tuesday's shock of a 1.9 percent cut to the dollar reference rate. The development is weighing on commodity prices as traders price in expected deterioration of terms of trade for Chinese importers. 
   Chinese yuan move rattling outside markets, too: Commodities are lower on the idea that China will bear a higher cost for imports. International equity markets are lower because of Chinese economy troubles that the currency development implies. Treasuries are higher as traders price in lower chances for a September rate hike. The dollar is actually down on the idea that China's large holding of dollar-denominated U.S. debt is a negative. 
****** Livestock markets likely to trade steady ahead of the USDA Supply and Demand report. *****
   Boxed beef made solid gains on Tuesday and should support cash prices when a market develops later in the week. The trend is still pointing up, but cattle futures are losing some momentum after having staged a sizable rebound since bottoming on July 27th. 
   The trade is turning bearish on hogs as supply numbers grow. Domestic demand is robust but export interest is failing to keep up. Traders suggest that cash values will do most of the work in eroding their current premium over futures.