AgriVisor Morning MarketWatch

Monday, September 12, 2016
***** Corn futures down a penny ahead of the break; soybeans down 4 1/2 to 7 1/4 cents; Chicago wheat off 1 to 3. *****

   # Report day.  Analysts expect the corn yield estimate to be lowered, with their average guess being 173.4 bushels per acre versus the USDA August 175.1.  The average guess for soybean yield is 49.2 versus August 48.9.
   # Traders are very much uncertain over what to expect out of USDA usage estimate adjustments for corn.  Exports ran a very strong pace at the end of the 2015/16 season but there was still a large amount of unshipped sales carried forward.  Ethanol demand was strong all year but probably fell short of an elevated target.
   # There is much more certainty regarding the likelihood that USDA will up its soybean demand numbers.  It is expected that an addition of up to 50 million bushels to the 2015/16 export estimate will offset the anticipated production increase to be found on the 2016/17 balance sheet. 
   # USDA can be expected to make some sizable changes to supply numbers for producers outside of the United States.  Russian wheat output can come down while that for Australia and Canada may rise.  A final cut could be made to Brazil’s corn crop.  China’s grain ending stocks estimates are always up for revision.  
   # Hedge funds are expected to go into the report with a net corn short near 175,000 contracts while remaining net-long soybeans by around 85,000.  The wheat short hovers under 150,000 contracts.  
   # After report day, it is likely for market participants to turn pretty quickly their focus toward harvest results and progress.  Crop Progress and Condition reports will be issued this afternoon with the national tabulations to be released at 3:00pm central.  
   # It is expected to be a wet week for the Midwest with the highest rainfall totals collected in Iowa.  The Sunday run of NOAA’s two-week outlook maps turned the forecast warmer with a bias toward higher precipitation chances east, lower west.  
   # Global equities are dropping further after a Friday that lopped 400 points off of the Dow Jones Industrial Average, 50 from the S&P 500.  Investors are showing some trepidation over all of the global central bank policy action that is expected to take place in the coming few months.   

***** Cattle futures look to open flat ahead of cash sales; hogs likely to start with slight follow-through strength. *****

   # Slaughters look to be tapering off but still run high enough to keep beef production up about 3 percent year-on-year.  Live cattle futures do not currently have the fundamental backing to spark much of a rally, but the lack of selling interest near $100 could point to big downside risk also being limited.              
   # Wholesale pork prices could not sustain momentum from a rebound attempt last week while cash hogs continued to be on the defensive.  There is some optimism involving the outlook for demand this fall, but also the expectation that production can keep up.