Thursday, August 20, 2015 AgriVisor Afternoon Marketwatch

Thursday, August 20, 2015

***** Corn futures gain 3 3/4 to 4 cents; soybeans rebound 12 to 18 with strength in the front of the curve; Chicago wheat up 10 to 11 3/4 cents. *****

   Corn and wheat prices were higher throughout the session as soybeans reversed higher after a poor start. The grains helped lead the broad commodity space higher while equities slumped. 
   The Pro Farmer crop tour continued to make headlines. Corn yields are coming in lower than expected, with notable variability in states out West that are supposed to have bumper potential. The Illinois number is 171.6 bushels per acre, matching well with the USDA's August estimate of 172. The final U.S. tour estimate is scheduled for release on Friday afternoon. 
   News of a large corn sale was issued on the USDA's daily reporting system. Mexico is buying 7.6 million bushels for delivery in the 2015/16 marketing year. The purchase announcement comes on a day when strong export sales were reported for the previous week. Old- and new-crop corn sales came in above expectations. 
   Temperatures are turning cooler across the Midwest. A cooler forecast represents a shift in the National Weather Service outlook that before last week had us expecting high temperatures for the back half of the month. After beneficial rains fell over the Corn Belt early this week, the region is expected to turn dry through the rest of August. 
   Soybean futures were able to recover after posting new contract lows overnight. The board was hitting new highs near the end of the day, but the most active November contract could not find a buyer over Wednesday's high. Future did retake the psychologically-important $9 level.

***** Hogs drop $0.725 to $1.30; live cattle gain $0.45 to $1.25 as feeders move fractionally lower in response to higher corn prices. *****

   Cattle futures rebounded after falling hard on Wednesday. Traders are not convinced that the wholesale market can give much more back in the near term. Futures will have more guidance when the cash trade develops more fully tomorrow and after the Cattle on Feed numbers are released. 
   Weaker prices in the direct market weighed on hog futures. Demand at the retail level has been strong but upside is limited by the outlook for growing supplies.