AgriVisor Afternoon MarketWatch

Friday, July 15, 2016
***** Corn futures give up 5 1/2 to 7 1/2 cents; soybeans down 5 to 11 1/4; Chicago wheat drops 5 1/4 to 8 3/4. *****

   # The last session of the week was a choppy one for the grains, with futures starting lower, recovering into positive territory by midday, and finally falling back into the close.  December corn futures gave up 4 1/4 cents on the week while November soybeans were just 1/2 cent weaker over the five sessions.  December Chicago wheat finished lower by 6 3/4.
   # Thursday’s bearish reversal and Friday’s follow-through to the downside were a product of lost conviction in the forecast.  Predictions from a few of the private forecasters were at odds with the government maps that show a high pressure system bringing extremely high temperatures into the Corn Belt next week.
   # The bullish outlook held by some for an adverse weather turn was offset by the week having featured rain coverage for the entire Midwest.  Five-day precipitation totals ran 1-1.5 inches for the driest spots of SE Iowa and W Illinois.  
   # Data from the National Oilseed Processors Association (NOPA) showed soybean crushings down on the month at 145.05 million bushels.  The tally was off slightly from expectations but still a record for the month of June.  
   # Chinese officials reported success for their initial round of auction offerings from state-owned soybean reserves.  That news along with a better-than-expected GDP report helped re-affirm strong Chinese demand prospects this week.   
   # A big daily sales announcement was made this morning with the USDA reporting that 320,000 metric tons of soybeans were booked by an unknown destination for 2016/17 delivery.
   # The weekly CFTC trader positions report showed funds having turned more bearish than thought on corn.  The large speculators cut 41,494 longs while adding 52,907 shorts, leaving them net-long by only 8,712 contracts.  Their net soybean long fell by just 8,102 contracts to leave them net-long by 159,407 contracts.    
   # The dollar was up against most of its trading partners after retail sales surprised to the upside.  June retail sales were up 0.6 percent on the month and beat a consensus estimate of +0.1 percent.  

***** Live cattle drop $1.80 to $2.22; feeders down $2.12 to $2.70; hog futures lower by $0.30 to $1.40 on bull spreading. *****

   # Bears have pointed to stubbornly high marketings and the resulting elevated beef production levels as reason to sell; the weekly slaughter was estimated to be almost 10 percent higher than a year.  Bulls suggest there should be some risk premium injected into the market to account for temperatures in the West heating up.   
   # More liquidation for hog futures to round out the week.  The CFTC trader positions report showed managed money cutting 7,781 longs and adding 1,519 short through last Tuesday.