Afternoon MarketWatch: Weak export report weighs on grains

Thursday, November 05, 2015
***** Corn drops a nickel as soybean futures fall by 20 cents; Chicago wheat holds steady in the front of the curve, drifts 1 1/2 to 4 1/2 cents lower in the deferred months.    ***** 

   # The export sales report was the bearish influence of the day.  Corn sales were down on the week at 21.9 million bushels.  Wheat sales were dismal at only 3.1 million bushels.  Soybeans took the brunt sell-side pressure after new commitments were 24.1 million bushels versus estimates of 50 to 65 million.  
   # Chicago wheat futures were able to buck the negative export news.  Production worries in Russia/Ukraine and quality issues in eastern Australia support the market.  Chicago wheat also enjoys bullish chart features after Chicago wheat hurdled over the 100-day moving average on Wednesday.    
   # Soybeans face some additional pressure from ideas that Argentine exports will increase after the country’s November 22nd presidential run-off election.  Both of the two remaining candidates are now suggesting that trade tariffs will be relaxed for the agriculture industry going forward.    
   # Reuters crop report estimates are circulating.  The average trade guess calls for corn yield at 168.4 bushels per acre versus the October USDA at 168.  Soybean yield is pegged at 47.5 bushels per acres, up from the current USDA 47.2.   
   # Producers in the U.S. continue to be tight-fisted with grain sales in the face of low prices.  Basis levels have improved in many areas as a mechanism to spark sales interest.  Traders were talking on Tuesday about ADM’s CEO estimating that only 30 percent of the 2015 corn harvest and 35 percent of this year’s soybean production had been sold by producers so far.   
   # Trade estimates are out for next week’s USDA report.  Corn expectations are up slightly, 13.564 bln. bu. crop with a 168.2 bu. yield.  Soybeans are expected to increase slightly too; 3.914 bln. bu. crop at a 47.5 bu. yield
   # Showers are expected to fall over much of the Midwest tonight.  Rains will move into the Northeast on Friday and back through the South over the weekend.  The two-week outlook remains wetter than normal for the Corn and Wheat Belts.  Temperatures should remain above-average for most of November. 

***** Live cattle futures drop $1.42 to $2.12 as feeders tumble by more than $4; Hogs continue lower with the front month futures contract down $1.50 on the day. ***** 

   # New contract lows were made by hog futures on Thursday.  Prices have now fallen in 11 of the previous 12 sessions. Funds are liquidating their longs as direct and product prices turn seasonally bearish.    
   # Cattle futures continue lower on weakening beef prices.  Cash bids are nonexistent as offers drop to $140 live.