AgriVisor Morning MarketWatch

Wednesday, August 10, 2016
***** Corn up a penny ahead of the break; soybeans higher by 5 1/4 to 6 1/4; Chicago wheat flat.  *****

   # The government’s 6-10 day weather outlook has higher temperatures mostly confined to the Upper Midwest but most of the region is expected to run dry.  Above-average temperatures are forecasted for the Corn Belt during the 8-14 day timeframe, but higher chances for rain return.
   # Renewed strength for the edible oil market is garnering some attention.  Asian palm oil prices have turned back higher as exports from the major producers Malaysia and Indonesia run strong enough to keep stocks from building.      
   # November soybeans are working on technical resistance from their 20-day moving average, which yesterday slipped below $10.  Other points of resistance include $10.06 and $10.35.
   # The weekly ethanol report will be out this morning to provide a look at related corn grind.  Solid ethanol production margins keep processors busy using corn.  USDA is likely to eventually bring the corn-use-for-ethanol estimate back up toward 5.25 billion bushels.  
   # The recent several trading sessions have featured a back and forth involving soybean bears that point to record U.S. yield potential and bulls buying on record demand.  Six of 23 analysts surveyed by Reuters expect USDA’s August soybean yield estimate to meet or exceed last year’s 48 bushels per acre. Robust shipment tallies and a string of flash soybean sales are confirming expectations that the 2015/16 marketing season will close strong while the new-crop trade program starts hot.  
   # First glance goes to U.S. grain yields upon the release of this Friday’s Crop Production report.  The trade next looks through the WASDE report to see how new U.S. production estimates compare with any adjustments to usage.  Then, attentions are turned the world balance sheets with this report featuring heightened importance for estimates including Brazil corn production, Argentina soybean production, China corn carryout, China soybean imports, and Russia wheat production.
   # A weak dollar index is failing to give much lift to commodities other than gold and the rest of the metals.  Traders are pricing out a lower chance of seeing an interest rate increase from the Fed this year.   
   # The American Petroleum Institute counted U.S. crude oil inventories that were higher than a week ago.  Similar numbers on oil and products stocks from the Energy Information Administration will be released mid-morning.  

***** Cattle futures open with a test of technical resistance from the October’s 100-day moving average; hogs look to open steady/firmer.  *****  

   # Higher wholesale beef prices and a smaller showlist lead to an optimistic outlook for cash cattle potential this week.  October live futures have last week’s $116.35 high to serve as technical resistance.                       
   # Hog slaughter numbers remain elevated but weights coming down slightly this week help out.  Recent strength for beef is supportive in the near-term.  Expansion encouraged by low grain prices will serve as a long-term negative.