Afternoon MarketWatch: Weak trade data weigh on grains

Monday, November 09, 2015
***** Corn futures drop 5 3/4 to 7 1/2 cents to start the week; soybeans fall by 1 to 3 1/2; Chicago wheat down 19 to 21 1/2. ***** 

   # Wheat leads the grains lower as world weather shifts more favorable and U.S. trade data disappoints.  Soy holds up relatively better on strength of recent export activity.  
   # A stock market selloff helped weigh on the broad commodity space.  Traders are betting that the Federal Reserve will announce an interest rate hike in December.   
   # Financial markets were also pressured by Chinese trade data that were released over the weekend.  Total trade volume for China has fallen by more than expected in 2015 and is viewed as a signal of economic troubles.     
   # Imports of goods like oil and steel were down for China last month, but soybean purchases were still strong.  At 5.5 million tons, soybean imports were down from the 7.25 million tons achieved in September but the number was up considerably on a year-over-year basis.     
   # Chinese economy weakness is coupled with fears for other emerging market economies.  The Organization for Economic Cooperation and Development announced a cut to its world growth forecast, bring expected output gains for 2016 down from 3.6 to 3.3 percent.   
   # The weekly export inspections report helped weigh on corn and wheat.  Corn shipments were about half of what was expected at 11.6 million bushels while wheat inspections were 10.4 million versus expectations of 10 to 15.  Soybean sales were also a bit behind expectations at 74.5 million bushels.  
   # A soybean sale showed up on the USDA’s daily reporting system on Monday.  126,000 tons were sold to an ‘unknown’ buyer for 2015/16 delivery.  The likely destination is China.  It was also announced that a previously-booked 257,000 ton sale was switched from unknown to China.   
   # The weekly Crop Progress report was released after the closing bell.  Corn was estimated to be 93 percent harvested as of Sunday while soybeans are 95 percent cut.  Winter wheat condition ratings improved on the week with 51 percent of the crop tagged good or excellent.  
   # Report day is tomorrow.  The USDA will release an update to the Supply and Demand tables at 11:00 a.m. central.  Analysts surveyed by Reuters looks for the corn yield estimate to move up from 168 to 168.4 bushels per acre.  The average trade guess calls for soybean yield to rise from 47.2 to 47.5 bushels per acre.  

***** Live cattle and feeder futures tumble limit lower; hogs drop $1.67 to $2.10. ***** 

   # Hog futures continue to move lower as slaughters run too high for demand to keep up with.  Managed money is liquidating longs and adding fresh shorts to the mix.        
   # Cattle futures were down the exchange-imposed limit on Monday after late Friday afternoon cash sales fell by more than anticipated.  Product values continue to move lower.  Slaughters are declining as a result of pinched margins, but that is leaving heavy animals that will eventually need to be marketed.