AgriVisor Morning MarketWatch

Wednesday, July 13, 2016
***** Corn up 8 to 9 1/2 cents; soybeans higher by 25 to 27 overnight; Chicago wheat up 5 to 6. *****

   # Grains show some follow-through strength after a friendly response to report day.  New highs for the session are being marked on an active morning trade.    
   # Recapping Tuesday’s WASDE report: Corn carryout for 2015/16 fell 7 million bushels when a 100 mbu gain was expected, allowing 2016/17 carryout to climb by less than expected.  As anticipated, an increased export target cut old-crop soybean carryout by 20 million bushels while extra acres contributed to an upward new-crop carryout revision, taking the number from 260 to 290 mbu.
   # Market analysts know turn to honing their expectations for changes to USDA yield estimates.  The August Crop Production report will give us a first official set of yield estimates for the row crops.  Last August, USDA added two bushels per acre to the 166.8 bpa that had been produced earlier in the season from their weather-adjusted trend model.   
   # USDA’s yield estimates could be expected to rise if they track closely with the government’s crop condition ratings and if those ratings for corn and soybeans hold steady.  Current ratings have the corn crop 76 percent Good/Excellent, soybeans 71 percent G/E; both ratings are even with those tallied by scouts on the week of the August 2015 crop report, when corn and soybean yields were estimated at 168.8 bpa and 46.9 bpa, respectively.  USDA’s weather-adjusted trend model currently pegs 2016 yields at 168 and 46.7.      
   # More rain for Missouri over the past 24 hours.  Overnight showers also extended into northwestern Illinois with most the region collecting no more than a few tenths of an inch.  A thunderstorm is beginning here in Bloomington, IL this morning.      
   # The weather forecasts have turned less certain about the possibility of hot, dry conditions reaching very far east into the Corn Belt.  Most of the Midwest is left open to development of storms through this weekend.  
   # Oil is of the few commodities not showing strength this morning, but a 50-cent loss for WTI futures comes after a $2 gain on Tuesday.  A monthly report from the International Energy Agency featured some glum market comments.  The weekly energy inventory report is out later this morning.   

***** August live cattle look to attempt a technical rebound at the start; August hogs start with a test of resistance from the 200-day MA. ***** 

   # Traders wait to see how the cash market develops this week, knowing that cattle futures continue to hold a hefty discount.  The wholesale market has been on the defensive but has also held up relatively better than futures would suggest.  USDA’s boxed beef records have choice values at 87.4 percent of a year ago, select 84.2 percent.             
   # Improved pork prices helped August hogs make a small rebound on Tuesday.  The deferred months were pressured in part by the USDA report that had 4th quarter production gaining 45 million pounds over the June prediction.