Wednesday August 26, 2015 AgriVisor Morning MarketWatch

Wednesday, August 26, 2015
***** Corn futures up a penny overnight; soybeans fractionally weaker; Chicago wheat up 1 1/4 to 1 1/2 cent at the break. *****

   Grains trade quietly mixed as outside markets remain jumpy: Corn trades higher in a four cent range as soybeans are a touch weaker with highs and lows within eight cents of each other. Chicago wheat follows corn moderately higher. Outside markets are still on edge as investors continue to sort out Chinese economy worries. 
   Hedge funds shown to be cautious with grain bets this week: Liquidation of soybean longs was the feature of Monday's volatile grain trade. Funds are likely close to even on corn and wheat this week. Last Friday's Commitments of Traders report had managed money holding still a net-long of 74,000 contracts of corn, with the soybean position a positive 20,000 and wheat a small net-short. 
   Corn continues to trade a consolidative pattern: The short-run technicals are neutral for corn futures now that contracts have traded within the range opened on report day, August 12th. The most-active December contract has not yet made success in a several-session test of resistance from its 20-day moving average. Soybeans are in a bearish downtrend with Monday's $8.55 low for the November being an important one.
   Old-crop soy usage still pacing strongly: Analysts are thinking the 2014/15 carryout will likely come down further as export shipments and crush rate continue to defy expectations. This week's tally is likely to get shipments over the 1.825 billion bushels target set by the USDA. Last month's surprise beat on the NOPA crush number adds to the idea that crush usage will surpass the USDA's current 1.845 billion bushel estimate. 
   Chinese stocks drop further on Wednesday: The Shanghai Composite decline 1.3 percent despite the Chinese government having intervened on Tuesday with an interest rate reduction. U.S. equities were shrugging off international weakness, with Dow futures signaling a sharper higher open. 

***** Hogs look to build strength on Monday's bullish technical reversal; cattle futures likely to attempt a rebound from oversold territory. *****

   It's shaping up to be an important open for hogs. Futures gapped up on Wednesday and now have strong technical momentum behind them. They also have key technical resistance ahead of them in the form of the 100-day moving average. 
   Wholesale beef prices remain stubbornly high even after a sharp correction in past several weeks. Boxed beef cuts run up to 98 percent of values observed a year ago. Packers would have the upper hand entering negotiations later in the week, but showlists are dropping and give sellers a chance.