AgriVisor Morning MarketWatch

Wednesday, October 05, 2016
***** Corn futures down 2 1/2 cents ahead of the break; soybeans up 3; December Chicago wheat down 1 1/2. *****

   # Corn and soybeans trade positions with the grain backing off while the oilseed recovers some of yesterday’s losses.  Corn settled higher for a third straight session yesterday with gain attributed to short-covering and technical buying.  Soybean futures were pressured by high yield estimates.  
   # Soybeans and meal futures are higher while soyoil slumps overnight.  Beans are taking over leadership for the complex while the U.S. harvest is in center focus.  Last month’s soyoil rally has lost some luster after the Asian palm rally did the same.  
   # December corn futures trade within yesterday’s range, $3.49 being the high.  $3.50 is expected to serve technical resistance, as should the upper 20-day Bollinger Band.  A breakout over $3.50 would provide a move with plenty of room, the next key high not coming into play until $3.80.  
   # $3.50 is technical resistance; it may also be a level that triggers increased farmer selling.  Early indications have the producer being a touch more aggressive of a corn seller than had been expected coming into the season.  High yields and full on-farm storage could encourage the trend.
   # Soybean prices still find some support from the weather forecast.  Rains are expected over the next few days throughout the western Midwest.  A brief dip for temperatures could spark some frost/freeze concern, but the two-week maps have otherwise turned very warm.    
   # The weekend weather outlook is uncertain as it depends on the track of Hurricane Matthew, which could brush up against Florida by Friday morning.  Some models suggest that the storm will round back out to the east after reaching up into the Carolinas, something that would lessen its influence on harvest weather in the Eastern Corn Belt.  
   # Much of the major growing regions in Brazil will have a chance at seeing rains today and/or tomorrow.  The moisture would be welcomed by farmers in what is still mostly a dry country. 
   # Brazil’s crop agency Conab will be out with its monthly update of estimates for corn and soybean production.  Analysts estimates for next week’s USDA crop report are beginning to circulate with survey results from Bloomberg/Reuters/WSJ due later in the week.  
   # China is on holiday this week, so soybean export business has been slow.  Yesterday featured a flash sale announcement for 100,000 tons of corn headed to an unknown buyer.  
   # Dollar index futures are up against recent highs as traders price in higher odds for a December interest rate hike from the Federal Reserve.  WTI Crude re-approaches $50 per barrel on sustained optimism over OPEC production freeze potential.   

***** October live cattle futures likely to chop around $100 for most of remaining contract life; hogs futures still vulnerable after 9 lower closes in 10.  ***** 

   # Live cattle futures bounced yesterday as bears covered shorts.  Bulls take it as a positive sign that there wasn’t any considerable follow-through from sellers after the nearby futures curve was pulled back below the $100 mark.  The fundamentals are no less bearish this week, though, with slaughters starting high and wholesale prices staying flat.      
   # Hog slaughters also start the week high and combine with heavy weights to keep the production pace accelerating.  Price action in the futures market has not been entirely negative given the outcome of last Friday’s bearish Hogs and Pigs report, but the technical trend remains lower.