August 18, 2015 AgriVisor Morning MarketWatch

Tuesday, August 18, 2015
***** Corn futures steady ahead of the break; soybeans down moderately; Chicago wheat off fractionally. *****

   Crop Progress numbers guide the overnight trade: Corn futures are holding mostly steady on crop condition ratings that dropped one point to 69 percent good or excellent, as expected. Soybeans are down on a good/excellent rating that remained unchanged at 63 percent, when a one point drop was expected. 
   Bumper expectations for spring wheat crop help weigh on Chicago prices: The U.S. crop is rated 70 percent good or excellent and is now 53 percent harvested. New estimates that call for record wheat production in France also pressure the U.S. market.
   Weather forecast mostly favorable for row crops: Growers will benefit from rains that fell early in the week. The two-week outlook from the National Weather Service has shifted toward a call for cooler temperatures. Rain has been taken out of the forecast for the last week of August, though. 
   El Nino strengthening as Pacific Ocean temperatures continue to rise: This year's occurrence of the phenomenon could end up being one of the strongest on record and its effects are expected to last well into 2016. El Nino could mean a warmer, wetter winter for North America. Growers in the Southern Hemisphere will look out for drier conditions that are sometimes associated with El Nino. 
   Corn futures losing technical steam: Momentum is fading after futures had staged a slight recovery from the report day rout. Monday's low will make for an important test of support at the hard open. November soybeans are approaching the low made on report day, which sits just above the psychologically-important $9 mark. 
   Chinese economy worries weigh on most markets overnight: The Shanghai Composite tumbled on Tuesday, serving as a sign on worry over economic conditions in china. A softening outlook for demand from the top-importer has bellwether commodities like copper and oil dropping. 

***** Hogs look to enjoy some technical buying at the open; live cattle futures consolidate as traders await guidance from the cash market. *****

   All eyes are on the cash markets this week, for both hogs and cattle. Friday's expiration of the August Hogs contract left October with a steep discount to the cash index. Direct hog prices have so far held up against calls for a seasonal dip. Cash cattle face pressure from showlists that have grown because of an inactive trade last week. Demand is strong but not expected to be sustainable as long as beef holds such a strong premium over other meats.