Morning MarketWatch: Grains trade without clear direction overnight

Tuesday, November 10, 2015
***** Corn fractionally lower for most of the overnight session; soybeans trade both sides of unchanged before taking on a slightly weaker tone just ahead of the morning break; Chicago wheat fractionally higher. ​*****

   # Grains trade mixed ahead of the November USDA report.  Crop Production and WASDE updates will be released at 11:00 a.m. central.     
   # The report has the potential to through some serious volatility into the mix as a great deal of uncertainty has clouded expectations coming into today.  First glance will go to production estimates, where traders look to find corn yield up from 168 to 168.5 bushels per acre and soybeans from 47.2 to 47.5.    
   # Monday’s Crop Progress numbers are of little importance to the trade today.  Corn harvest is pegged at 93 percent complete with soybeans 95 percent cut.  Winter wheat conditions improved last week to 51 percent good or excellent.              
   # Brazil’s crop agency Conab upped the country’s 2015/16 soybean production estimate by 1 million metric ton to a range of 101.2 to 102.8 million tons.  USDA’s October estimate called for 100 million tons.  Traders will look to see if that number is adjusted today.                 
   # Australian meteorologists issued a report on El Nino that suggested the phenomenon will stick around with considerable strength into the next calendar year.  Fund traders have been buying sugar and palm oil as a partial result of El Nino weather worries.       
   # Wheat prices were pressured on Monday by a weather forecast that included much-needed rain for Russia and Ukraine.  Cold temperatures will remain a threat to early-developed crops in the region.       
   # Brazil’s ports remain congested with a backlog of ships waiting to load.  The country’s internal logistics are not running the smoothest either, with sporadic trucking strikes still popping up across the country in protest against fuel prices and taxes.      
   # Dollar index futures trade higher overnight after giving back only a fraction of the recent strength on Monday.  The index notched in fresh 6-month highs on Friday and sits just below the 13-year high established in March.  

***** Livestock futures look to continue lower at the start; hogs may rebound at the open but will likely return to being on the defensive.  ***** 

   # Cattle will have a tough go of it on today’s open after futures were locked limit-down on Monday.  Traders reacted to the cash trade from late Friday afternoon that was weaker than anticipated.  Demand is a worry, so market participants will look to wholesale prices for guidance in the near-term.      
   # Slaughters were estimated to run 440,000 head on Monday versus 432,000 last week and were higher than the year-ago number too.  As the fundamentals turn seasonally negative and match up with bearish chart indicators, fund traders are making quick work of long liquidation.