AgriVisor Afternoon MarketWatch

Friday, July 29, 2016
***** Corn futures finish 4 cents higher; soybeans rally 24 to 29; Chicago wheat down 1 1/2 to 2 1/2. ***** 

   # A weak dollar was supportive of the broad commodity space.  The yen rallied on news that the Bank of Japan would not be making any major monetary policy adjustments.   
   # Short-covering was a phrase used by some to describe the day’s action, suggesting that traders were squaring positions at the month’s end.  But, the large speculators are not big holders of soybean shorts and it was the oilseed that led the way higher.  
   # Today’s action put the most-active soybean contracts back above the psychologically-important $10 mark.  November futures spent just four sessions under $10 since falling below on July 22nd.  A close above the 10-day moving average was technically positive, but the contract still trades short of its 100-day MA, which hovers near $10.22.  
   # A daily sales announcement for soybeans helped spur some buying interest.  An unknown buyer agreed to take delivery of 129,000 tons with 63,000 booked for the 2015/16 marketing year.
   # The series of auctions from the Chinese state soybean reserves started off on a positive note a few weeks ago but has lately become a disappointment for officials there.  In the latest auction round, only 14 percent of offered bushels were sold, pointing to a favorable discount held by soybeans sourced from abroad and thus the potential for sustained demand for U.S. exports.         
   # Wheat futures failed to find support from a report that found disappointing yield potential for the U.S. spring crop.  Also shrugged off was a downgrade for a late-harvested French wheat crop, which stands at 40 percent Good or Excellent compared with 77 percent G/E a year ago.
   # The forecast calls for scattered showers in the western Midwest this weekend that will moved east by Monday/Tuesday.  The 6-10 day map has temperatures staying warm in the Midwest with likely moderation in the 8-14 day timeframe.  The two-week outlook leans drier than normal. 
   # Ditching 14,770 longs and adding 23,043 new shorts, fund traders were shown by the afternoon CFTC report to have built a net-short corn position that totaled 67,571 contracts through Tuesday.  The report featured both liquidation of longs and covering of shorts within the managed money soybean tallies.  The net-long soybean position totaled 109,629 contracts.      
   # WTI crude futures traded with small gains in late afternoon trading on an attempt to break a six-session losing streak.  The bears are pointing to inventories of gasoline and distillates that run high despite falling levels of oil production in the U.S.

***** Live cattle settle $0.20 to $0.37 higher; feeders down $0.17 to $0.62; hogs finish fractionally weaker. ***** 

   # The afternoon trader positions report confirmed that the funds were a participant in the early week cattle futures rally, with the managed money net-long growing by about 4,000 contracts.  Futures finished this week quietly as traders waited for more guidance from an as yet undeveloped cash market.  
   # High slaughters and heavy weights still keep the hog market on the defensive.  Thursday’s export sales report featured a disappointing dip for sales, notably to China.  October hog futures finished with gains in only two of July’s 20 trading sessions and dropped almost 18 percent on the month.