Morning MarketWatch: Commodities starting November on the defensive.

Monday, November 02, 2015
***** Corn futures down 2 to 2 1/2 cents ahead of the break; soybeans fractionally firmer; Chicago wheat down 3 to 4.​ *****

   # Commodities are broadly lower to start the week.  Corn and wheat are weaker, but losses are limited as ranges are relatively tight.  Soybeans are the exception, taking on slight strength.        
   # Rain developed in the Plains states on Friday evening and moved through the Midwest on Saturday.  Efforts aimed at finishing up harvest were thwarted, but the moisture was generally welcomed, especially by winter wheat growers.    
   # Growers in Brazil welcomed a healthy dose of moisture this weekend.  Mato Grosso is still a touch on the dry side, but last week’s rains will likely go a long way in supported the newly planted soybean crop.      
   # Estimates for the November 10 crop report will begin to circulate today.  There is likely to be wide disagreement on what to expect out of the corn yield number, but most analysts are looking for a small addition to the bean yield estimate.  
   # Crop Progress estimates will be reported after the closing bell.  Traders are expecting to see corn harvest up to 90 percent complete with soybeans nearly 95 percent cut.           
   # Funds were net sellers of the agricultural commodities basket during the last reporting week.  The large speculators did add a very small number of longs to their bullish corn bet and covered a substantial portion of the wheat short.  Managed money remains close to even on soybean holdings.                 
   # Chinese authorities are making it increasingly harder for importers to buy U.S. dried distillers grains.  A higher regulatory burden is being placed on traders in an effort to encourage use of domestic grain inventories.
   # Stock markets around the globe look to start the week off on the defensive after a Chinese purchasing mangers index report indicated contraction.  
   # Bond futures are now pricing in a 50-50 chance that interest rates will rise in December.  

***** Cattle futures likely to trade lower at the start; hogs look to recover from a technically oversold position. ***** 
   # Hog futures were pressured from liquidation efforts last week that arose from the WHO story linking processed red meats to cancer.  Seasonal production tendencies are likely to limit upside potential through the next several weeks.     
   # Last week’s minimal cash market activity foreshadows what is likely to be pessimistic expectations for the cattle trade this week.  Sustained strength for beef prices would help.