Morning MarketWatch: Low volume trade leaves grains mostly lower overnight.

Tuesday, November 03, 2015
***** Corn futures down fractionally as soybeans drop 2 to 3 cents overnight; Chicago wheat finding strength as trade toward the morning break. ​*****

   # Corn futures trade within just a one cent range for most of the overnight session. Soybeans sit near the night’s lows but losses are only moderate.  Trading volume is extremely light.          
   # Monday’s Crop Progress report showed the corn harvest at 85 percent, near the low end of expectations after some wet weather disruptions last week.  Soybeans are estimated to be 92 percent cut with the bulk of remaining harvest work to be done in the Mid-South.  
   # The wheat market is the weak link for the grains so far this week.  Chicago futures have given back nearly half of last week’s gains after healthy rains moved through the Wheat Belt on Friday and Saturday.
   # Dry conditions for major growing regions in the Black Sea and Australia could provide a backstop for the wheat market.  Russia and Ukraine have faced several production estimate downgrades lately while a hot October threatens output potential in Southeast Australia.  
   # FC Stone kicked off the pre-report expectations discussion by releasing a corn yield estimate of 168 bushels per acre (matching the current USDA forecast) and a soybean estimate of 47.5 (versus USDA 47.2).  
   # The grain export programs are receiving plenty of attention now that harvest has nearly wrapped up.  Soybeans shipments last week were again strong at 94 million bushels. Corn inspections were a disappointing 19 million bushels while wheat was poor at only 6 million.               
   # The charts are technically weak, but the grains are holding various levels of support for now.  December corn is maintaining loose support from $3.75 and will test last week’s $3.75 1/2 low today.  Nearby soybeans will try to bounce after having made a 62 percent retracement of the move up out of the September low.  Chicago wheat currently trades ahead of the psychologically-important $5 mark.  
   # Energies are enjoying a Turnaround Tuesday so far, rebounding out of moderate losses from the start of the week.  Sluggish economic data out of China still puts some caution into the oil trade this week.      
   # Dollar index futures are higher as the yen and euro drop, but the Brazilian real and Russian ruble were both higher against the dollar on Tuesday.    

***** Cattle futures look to open steady\higher with limited upside early on; hogs look to hold support from contract lows, bounce from oversold territory. ***** 

   # Surprising strength in the wholesale beef market is lending some support to cattle futures, but upside is limited until the direction of the cash trade is known.       
   # Hog slaughters are down to start the week but continue to run higher than they were a year ago.  Cash prices firmed slightly on Monday.  Nearby futures are in the process of testing lifetime contract lows.