AgriVisor Afternoon Marketwatch

Wednesday, July 27, 2016
***** Corn futures ended 3 higher, soybeans 12-17 higher, and Chicago wheat mostly fractionally lower. ***** 

   Weather is the key element that is guiding the grain trade, corn and soybean markets in particular.  The turn to warmer than normal forecasts has been supportive, but given the crop condition and the moisture levels, the gains have been somewhat moderated. 
   Today’s new 6-10 and 8-14 day outlooks continued to forecast warmer than normal temps for much of the eastern 2/3rds of the U.S.  But today, the longer range one shifted to below normal moisture, a shift that will cast a little more doubt about how these crops might finish this year.  The trade is putting these shorter outlooks in the context of the outlooks for weather into the fall being warmer than normal. 
   # There were a couple of export sales reported on the daily system today.  131,000 tons of soybeans was sold to China.  247,912 tons of corn were sold to unknown. 
   Exports will be a part of the mix tomorrow with the weekly sales report.  The trade expects: 400-600,000 tons of wheat, 800,000-1.5 mmt. of corn, 800,000-1.5 mmt. of soybeans, and 100-300,000 tons of soymeal.
   Wheat traders are watching the results of the tour across N. Dakota.  The early results have been good, with one route having a 62.7 bu. yield on the first day compared to last year’s 53.  Another route had a 53 bu. yield, higher than last year as well.  But a 3rd car only had a 41.5 bu. avg. compared to last year’s 40. 
   The Russian crop garnered attention too with a new report coming from the USDA Ag. Attaché.  The Attaché raised his forecast 7 mmt. to 107.7.  It’s nearly as large as their 108.2 record from 2015. But as much as was made of it, the numbers for various crops are close to the official USDA numbers.
   # The Dollar got rocked slightly at the close of the Fed meeting, with the announcement they weren’t changing policy just yet.  The Bank of Japan holds their meeting at week’s end, which could continue to subdue activity in the short term.

***** Live cattle finished $0.07-$0.55 higher; feeders ended $0.10 higher to $0.82 lower, with lean hogs $2.05 to $2.92 lower. ***** 

   The cattle trade is still running on the energy of the COF report, but today’s slippage in the wholesale market started to undermine futures buying interest.  Cattle are still thinly traded with a steady/weak tone. 
   Hog futures continue to be pressured by collapsing wholesale prices, with the cutout dropping $4.02 today. That keeps downside pressure on cash hog prices, although their losses were more limited.