AgriVisor Morning MarketWatch

Thursday, August 11, 2016
***** Corn fractionally higher at the break; beans fractionally weaker; Chicago wheat up a penny.  *****

   # Grains trade quietly on light volume overnight.  Market participants are digesting the weekly export report but have little fresh news to go on otherwise. 
   # Weekly soybean sales were even larger than anticipated.  New commitments for 2016/17 totaled 2.79 million tons (102 million bushels).  Corn sales were also at the top end of expectations at 594,000 tons (23.4 mbu) old and 1.02 mt (40.2 mbu) for the new-crop.  Wheat sales were strong as well at 607,600 tons (22.3 mbu).  
   # Expectations for a pair of high U.S. corn and bean yields to be issued on tomorrow’s report get in the way upside for the market.  Futures would likely have considerable gains to show on recent demand strength had not the supply-side negativity been in place over the past several weeks.
   # Fund traders look to be content with going into tomorrow’s crop report bullish beans and bearish corn.  Short-sellers outnumber what is still a big group of longs to leave the entire managed money trader category net-short by approximately 100,000 contracts of corn.  There are very few soybean shorts and so the net-long is a more pure 100,000 contracts.  
   # Trading volume remains high for Chicago wheat futures.  Open interest was up 4,500 contracts on Wednesdays as some new buyers stepped into the market but had dropped earlier in the week on some short-covering.  Fund traders still have not budged much from their holding of a near-record net wheat short.
   # A cold front is moving into the Midwest at the end of the week and bringing showers with it. The upper-half of the Corn Belt is expected to lean drier as we turn a new week.  Forecasters see a chance of temperatures moderating for the back half of August.  
   # China remains an active buyer of U.S. soybeans.  Another daily sales announcement is expected from the USDA today.  Sales of more than 100,000 tons of grain are usually reported at 8:00am central on the day following the deal.  

***** Cattle futures look to open mixed ahead of cash deals; hogs steady/firmer.   *****

   # Cattle futures have been consolidating on last week’s highs while traders wait to see how this week’s cash market shapes up.  Current expectations are optimistic over the potential for a higher cash trade.                         
   # October hog futures closed higher for a change on Thursday as buyers thought they might be seeing a short-term bottom for the pork market.  Futures are struggling with resistance from the 10-day moving average and trade not far ahead of contract lows.