August 13, 2015 AgriVisor Morning MarketWatch

Thursday, August 13, 2015
***** Corn futures up 2 1/2 cents at the break; soybeans 7 1/4 to 8; Chicago wheat higher by 3 3/4 to 4 1/4. *****

   Fund trader sentiment to help guide grains from here: Managed money went into the report with a bullish bet on corn and soybeans but bailed on a good chunk of the position when the numbers were released, selling on the net about 30,000 contracts of corn and 25,000 of soybeans. Now that prices have been knocked back toward last fall's lows, funds may become willing to double down on the buy side. 
   Report friendly for cotton at least: Prices went limit up after USDA analysts had production and carryout numbers well below pre-report trade estimates. On lower yields and fewer harvested acres, cotton production is expected to decline nearly 20 percent on the year. 
   Export sales weak in old-crop, solid in new: Exporters added about 1 million bushels of new corn sales to the 2014 book, but traders were thinking it could have been as much as 10 million. New-crop sales were above expectations at 18.3 million bushels. A small addition was made to the soybean book for 2014 and a solid 24.3 million bushels added for 2015. 
   Weather forecast turns wet: The National Weather Service's outlook has shifted to now call for a wet second half of August. Showers are expected for the Corn Belt late this weekend and sporadically throughout next week. The forecast for the rest of the month still leans hotter than average. 
   Traders talking about a global currency war: China's currency devaluation has markets rattled with analysts uncertain over the eventual impact on the dollar. The move could send the dollar higher if other Asian countries are forced to devalue. But, a strong dollar makes dollar-denominated debt owned by China and others more expensive to service, which can make the dollar look less attractive. 

***** Hog futures have room to improve on Wednesday's strength; buyers likely to prop up live cattle prices at the open. *****

   The August hog contract will go off the board this week, leaving the October with a substantial discount to the cash index. Traders are thinking the cash market will do most of the work on convergence. Futures do find mild support from strong domestic demand.
   Packers seem to have the upper hand again going into auctions this week, lowering their bids to $147 versus the $150 to $152 negotiated last week. Supplies are still relatively tight in the short-run and opposed with robust demand to provide some support to prices.