Morning MarketWatch: Corn futures headed for test of key chart support.

Thursday, October 15, 2015
***** Corn futures down 2 to 2 1/2 cents ahead of the morning break; soybeans down the same; Chicago wheat off a penny. *****

   # Corn futures are moving lower for an important test of technical support at $3.75 after the December contract fell below the 50-day moving average at the close of yesterday’s bearish ‘outside day.’ 
   # Basis levels maintaining strength as farmer selling is light.  Some in the trade are suggesting better basis is also reflecting a smaller than expected corn crop in parts of the Midwest.            
   # Malaysian palm oil exports were down in the first two weeks of October, deflating the enthusiasm that the bulls had developed early in the week over vegetable oil data.  Soy oil futures are down only moderately overnight and still maintain gains of nearly 10 percent since bottoming in mid-September.                 
   # Some weather risk premium is being removed from wheat futures as rain enters the forecast for Russia and Ukraine.  But, the rain may prove to be too little too late after cold, dry conditions have stressed crops in the region.   
   # Egypt has issued a tender for wheat, the result of which will be reported on Friday.  Russia has sourced most of Egypt’s purchases this year, but an export tax is making it harder for the Russians to compete with other traders in the Black Sea and Europe.      # This month’s NOPA soybean crush report will be released today at 11:00 a.m. central.  Traders are expecting to see something near 129 million bushels. Crush demand is shaping up to be robust again this year, with the USDA recently upping their crush target to 1.88 billion bushels, or 48 percent of expected production.      
   # Soybean exports have room to improve, as sales currently run behind last year’s pace by 25 percent.  The USDA target is for total sales to fall by only 9 percent on the year.  
   # U.S. stock index futures are up overnight as they catch some enthusiasm from a stock rally in China.  Stocks are also finding support from traders thinking the Fed won’t raise interest rates in 2015.        

***** Hog futures look to open steady/higher; cattle futures may have potential to inch higher. ***** 

   # The October hog contract went off the board on Wednesday to leave the December with a notable discount to the cash market.  Traders still maintain optimism over the cash market, so the idea is that futures still have room to run.    
   # Cattle futures are likely to trade quietly until market participants get to see how cash prices develop later today and Friday.