AgriVisor Afternoon MarketWatch

Tuesday, August 09, 2016
***** Corn down 2 to 3 cents; soybeans up 2 to 3 3/4; Chicago wheat steady to 2 lower. *****

   # Trading volume was again very low for corn and soybeans, in part indicating speculators are not yet doing much in the way of position adjusting ahead of the crop report.  At the same time, producers are not active sellers of the grains and less commercial hedging activity is therefore required.  
   # Fund traders seem comfortable heading into the crop report with a good-sized soybean long, which estimated at around 125,000 contracts.  The managed money corn position is net-short, but it features disconsensus as approximately 150,000 longs are still held.  
   # December corn futures continue to struggle with minor resistance from their 10-day moving average.  It was an inside day for the contract since today’s move did not stretch outside of Monday’s high or low.    
   # Traders were today unwilling to own November soybean futures above $10.  Just ahead of the market are points of resistance from the 20-day moving average and a recent high at $10.06.
   # A daily sales announcement was issued by the USDA to report 120,000 tons of soybeans booked by an unknown buyer for delivery in 2016/17, making for a 10th straight day to include a flash export sale.
   # Brazil’s crop agency Conab lowered again its estimate for corn production, from 69.1 to 68.5 million tons.  They did the same for soybean output, from 95.6 mt in July to a current 95.4 mt.  USDA’s July estimates for Brazil corn and soybean crops were 70 and 96.5 mt, respectively.  
   # Without fresh news of its own, wheat is taking direction from the corn market.  The crop report is expected to feature sizable adjustments on the various world production estimates, but it is generally agreed that output gains and losses will be offsetting of one another.  Higher output predictions are expected for Russia, Canada, and Australia while reductions are anticipated for India and the EU.
   # It was a mostly quiet session for non-grain commodities and outside markets: cotton down, sugar down, cocoa down, coffee flat; gold and the rest of the metals up except for copper; energies broadly lower; equities fell flat after the noon hour while treasuries were up and dollar index down.            

***** Live cattle futures gain $0.05 to $0.55; feeders up $1.05 to $1.72; hog futures down $0.17 to $0.65. ***** 

   # Higher beef prices were cause for some optimism regarding cash market potential.  Choice cuts were up $1.02 at midday with select higher by $1.38.  October live futures gave some back into the end of the session to settle short of the 100-day moving average.            
   # Nothing to change the fundamental outlook, hog futures fell further.  Census data out yesterday on June exports confirmed day-to-day trackings that have found pork exports up year-on-year but only because more shipments to China have offset softer demand from our usual customers.