AgriVisor Morning MarketWatch

Thursday, September 29, 2016
***** Corn futures up 3 1/2 ahead of the morning break; soybeans higher by 7 3/4 to 8 1/2; Chicago wheat gains 2. ***** 

   # Corn and soybeans are up this morning to take back what was lost on Wednesday and a touch more.  Traders are seen taking some profits on shorts ahead of report day. 
   # Corn and soybean futures were unable to take advantage of strong export sales totals announced on Wednesday.  Market participants will get a look at the weekly tallies this morning and will also expect to see some soybeans on the flash sales system at 8:00am central.
   # China’s soybean crush margins are strong enough that the top-importer is expected to continue being an active buyer in the next few weeks ahead.  Chinese traders go on holiday next week and so will likely make some purchases ahead of the weekend.     
   # Trading volume remained light on Wednesday for corn, soybean, and wheat futures.  Open interest was up slightly for corn and beans, down for wheat.  Friday’s reports will be expected to spark a more active trade to lead us into what is historically a very active month of October for grain futures. Friday’s Grain Stocks and Small Grains Summary reports coincide with the usually-active last day of the month and last day of the quarter.     
   # The forecast turned slightly wetter for the eastern Midwest over the next few days but rainfall odds are highly variable throughout the region.  The 6-10 day map shifts wetter weather west and keeps it drier east of Illinois.  
   # Meteorologists call for Southern Brazil to run dry through the end of the weekend.  Rainy weather could develop in the major growing state of Parana by Sunday night with Mato Grosso in central Brazil maybe receiving moisture on Monday and Tuesday.  Dry weather has been an issue for growers in Brazil during their spring row crop plating season.    
   # Stock traders await earnings from a handful of food and food retail companies, including ConAgra Foods, Costco Wholesale, and PepsiCo.  Some such U.S. stocks have struggled as of late due to grocery prices having been on a steady decline this year.    

***** Live cattle futures to price in cash deals while chart traders position themselves around the $100 mark; hogs to potentially benefit from short-covering ahead of Friday’s headcount report. ***** 

   # Cash cattle deals are being booked mid-week at $103-$104, or $3-$4 lower than last week.  Live futures trade at levels not seen since fall 2010.  They are once again down close to a potential technical backstop at $100-even.
   # Hog futures are likely to continue featuring an active spread trade as market participants wait to see how Friday’s Hogs and Pigs report turns out.  Unless the report presents a very-friendly surprise, hogs should remain on the defensive while pork production accelerates and while the meat faces such stiff competition from beef.