Friday, August 28, 2015 AgriVisor Afternoon MarketWatch

Friday, August 28, 2015
***** Corn finishes steady on the day after giving up early-session gains; soybeans climb 6 to 7 cents; Chicago wheat ends lower by 6. *****

   The approaching U.S. row crop harvest puts corn and soybean futures on the defensive. Seasonal studies do not suggest great rally potential for the next few weeks. With the USDA's production estimates calling for yields above trend, the supply-side case makes it difficult for the grain bulls to gain much traction.
   Dry conditions are helping the corn crop mature quickly. Rain could fall over the northwestern portion of the Corn Belt tonight and tomorrow, but the two-week forecast does not call for wide rain coverage. Temperatures across the Belt are expected to warm considerably next week. Soybeans in the Eastern Corn Belt are said to be a bit thirsty.
   Market participants are eager to see the Friday afternoon Commitments of Traders report from the CFTC. Managed funds are still long approximately 50,000 contracts of corn and 8,000 soybeans. They are thought to have added somewhat considerably to their net-short wheat position. 
   Thursday's report from the International Grains Council has traders talking about a probable increase in acres planted to soybeans in Brazil. Brazilian growers have favored from beneficial trade terms and are set to enjoy another big export season. But, there is some caution over yield expectations because of low farm incomes and costly inputs. 
   Oil futures again led the commodity indices higher. There has been some bottoming action presented by oil prices after a bearish weekly stocks report failed to pull futures down to new contract lows. Traders were adding risk premium to the board on Thursday and Friday because of reports that Saudi troops had entered Yemen. Oil from Saudi Arabia has to move past Yemen on its way out of the Red Sea. 
   Stocks were choppy on their way to ending an extremely volatile week. Traders were pricing in interest rate expectations as Federal Reserve officials spoke to reporters at the Jackson Hole Economic Summit. Action in the bond market implies a 38 percent chance of a September rate hike. Economic data was also being digested, first a solid GDP number from earlier in the week and next a set of strong consumer spending data. 

***** Hogs end fractionally mixed; live cattle futures gain $0.97 to $1.50 as feeders climb $2.35 in the Sep. *****

   Cattle futures were moving higher behind cash bids that had improved over earlier postings. The cash trade was still largely undeveloped as of midday. Futures were gaining some minor technical momentum after they had rebounded out of oversold territory on Thursday.
   Hog futures traded somewhat quietly as they consolidated on recent gains. The most-active October contract dipped lower early in the session but did not close the chart gap opened on Tuesday. Wholesale prices started out sharply lower. Morning cutout values were mostly higher.