AgriVisor Afternoon MarketWatch

Thursday, July 14, 2016
***** Corn futures give up early gains to finish 3 1/2 to 5 cents lower; soybeans drop 39 to 43; Chicago wheat down 4 1/2 to 5 3/4. *****

   # An early-session grain rally deflated as buyers who were less convinced about potential weather troubles started to take profits.  
   # Midday runs of the short-run weather forecasts assigned lower chances for ridging to stretch very far east into the Corn Belt.  
   # Rainy weather stuck around in the southern Plains also moved through parts of the Delta today.  Scattered showers are expected to pop up again tomorrow in the same regions and in the area that connects them in southern Missouri.
   # The weekly export sales report was strong for corn, a touch weak for soybeans.  Cumulative soybean bookings run ahead of last year but shipments have just 7 weeks left in the marketing year to catch up to the USDA’s 1.795 billion bushel goal.
   # Mexico has surpassed Japan as top-buyer of U.S. corn recently.  Our neighbor to the south has increased purchases by nearly 18 percent year-on-year, while Japanese buyers have agreed to take 10 percent less.  Proximity and friendly trade agreements keep the spout into Mexico open while shifting currency terms and cheap supplies from South American and the Black Sea put a damper on Japan’s interest in U.S. corn.
   # Analysts are already honing their predictions ahead of the August Crop Production report, on which the season’s first official yield estimates will appear.  The closely-watched analysts at Informa have corn yield at 167.9 bushels per acre and soybean yield at 46.9 bpa.  USDA’s current weather-adjusted trend yields are 168 and 46.7.  
   # An outside reversal was one of a few bearish technical developments for soybean futures today.  The November contract surpassed an important high from last Tuesday but could not close the down gap that stretches up to $11.36 1/4.  Novie futures also fell back below a down-trending set of 10-, 20-, and 50-day moving averages.  
   # It was not a bullish day technically for corn futures, but the December contract did avoid dropping under Wednesday’s low.  It also held support from the 50-day moving average.  The session high was $3.80, which is a nickel short of a 38 percent retracement target.
   # It was risk-on for the rest of the commodity space on Thursday. The softs had another big session with cotton stretching a five-day gain to 14 percent.  Sugar also continued on what has been a monster run for the commodity in 2016.       

***** Live cattle up $1.10 to $1.72; feeders up $1.45 to $2.57; hog futures finish lower by $0.15 to $0.60. *****

   # Live cattle futures bounced further as the front the curve climbed toward cash prices that were being recorded in small volume at $116-$117.  Wholesale prices have held up relatively well in the face of recent futures weakness, but the outlook is for beef production to remain elevated.  
   # Hog futures followed cash and wholesale markets lower on the day.  Buyers did not show any conviction on the August contract’s brief move above its 200-day moving average.