AgriVisor Morning MarketWatch

Tuesday, August 09, 2016
***** Corn down 1 1/4 at the break; soybean futures off 6 1/2 to 7 1/4; Chicago wheat drops 1 1/2 to 5.  ***** 

   # The next few days of weather include chances of showers brought along with a cold front that moves into the Northern Corn Belt.  Higher temperatures are expected to return in the region over the next two weeks while the Midwest stays generally dry.  
   # Condition ratings for the U.S. corn crop fell by two points to 74 percent Good or Excellent last week.  Market participants were looking for a one-point decline.  A first estimation for the year has 9 percent of the corn crop dented versus 8 percent a year ago and 12 percent the five-year average.
   # The soybean crop was rated 72 percent G/E through Sunday, unchanged from the previous week.  Government crop scouts estimate 69 percent of soybean to be setting pods versus 65 percent last year and 61 for the average.  
   # Spring wheat harvest is approaching a third done versus a more normal 15-20 percent.  Early results have yields falling short of last year.  
   # Fund traders are keeping hold of a sizable net-long soybean position heading into the report.  Bulls bet that any production increase will be offset by a drop in carryout for 2015 crop that should result from a higher export estimate.
   # Russia is on track to haul in a record large grain crop in 2016.  Harvest has gone without hiccup and runs well ahead of normal pace.  Russian analysts have bumped up their estimate for total grains output to 116 million tons.  That includes a wheat crop near 70 mt versus USDA at 65 mt in July. 
   # Traders are positioning themselves for Friday’s report against expectations from the industry analyst.  The Reuters poll averaged yield guesses to 170.6 bushels per acre for corn, but included a wide range of predictions from 168.6 to 175. Soybean yield consensus is 47.5 bpa within a range of 46.7 to 48.8. 
   # Outside markets are of little influence to the grains this morning with U.S. equity index futures flat, oil steady, the dollar index unchanged.  There feels to be a growing agreement that the health of the global economy has been improving in recent months.         
***** Cattle futures likely to start steady/firmer; hogs look to open uneven but mostly firmer.  *****  

   # October cattle futures are consolidating on the top of a move that allowed the contract to break out of a descending channel that had funneled prices lower since early in the year.  Lighter offerings in the cash market may help to sustain last week’s strength, but packers are not showing their hand with any bids at this point in the week. 
   # The fundamentals remain bearish in the hog market with high slaughters recorded already at the start of the week.  Of only small support are a set of technical indicators that point to an oversold futures market.  October futures have managed to settle with gains in only 5 sessions since July 1st.