AgriVisor Morning MarketWatch

Friday, July 08, 2016
***** Corn up 5 to 7 cents at the break; soybeans higher by 14 to 17; Chicago wheat gains 3. *****

   # Weekly export sales were strong for soybeans, disappointing for corn.  New soybeans sales for 2015/16 totaled 23.4 million bushels with 2016/17 sales at 21.5 mbu, both at the top end of expectations.  Corn sales for 2015/16 at 37 mbu and for 2016/17 at 17.4 mbu compared with estimates at 25 and 20 mbu, respectively.  Wheat sales were better than expected at 30.3 mbu.
   # Weather has turned favorable for most growers but a shift back to high temperatures could become a slight worry if the heat persists through the rest of the season.  The government maps put a good chance on temperatures rising in the Corn Belt over the next two weeks but some private forecasters suggest major ridging will be confined to the West.
   # Action in the Asian palm oil markets is no longer the everyday influence for U.S. soy that it was during the winter months.  Palm oil prices are dipping now that El Nino’s exit should allow production levels to recover in the season ahead and because there remain some pessimism over the outlook for Chinese demand.
   # Changes in hedge fund positioning have been more difficult to pin down during the recent string of volatile trading sessions.  Money managers were estimated to have pared approximately 20,000 contracts from the net soybean long on Thursday, leaving that position near 125,000 contracts.  A couple weeks’ worth of liquidation has not been enough to leave the net corn long any less than 100,000 contracts. 
   # Wheat futures have spent much time this week trading higher, only to eventually fall flat due to pressure from weaker corn or soybeans.  U.S. winter wheat harvest is now approaching two-thirds done and market participants have had sufficient time to price in stellar yields.  Prices that have fallen to 10-year lows are now expected by some to begin spurring better demand for the grain.
   # The much-anticipated jobs report featured a strong set of numbers.  Nonfarm payrolls jumped 287,000 in June to make economists’ expectations of a 180,000 gain look like a big miss.  The weak May payrolls total was also revised slightly higher.  Stock index futures added further gains and the dollar index reversed higher on the news.                  

***** Cattle futures look to open steady/firmer; hogs futures firmer. *****

   # Cattle futures await guidance from the day’s cash trade.  Cash bids stood Thursday at $119 on offers of $125.  August live cattle futures look to keep technical support from this week’s $111.07 low and build momentum for a test of the 20-day moving average just overhead.      
   # Traders may become encouraged again about prospects for pork exports, having been reminded this week that outbound trade is running considerably higher on the year and improving each month.