AgriVisor Morning MarketWatch

Thursday, October 06, 2016
***** Corn futures drop 6 1/2 to 7 1/4 cents; soybeans steady to up 1 3/4; Chicago wheat lower by 8 to 9 1/4. *****

   # Early session weakness for futures was attributed to technical selling after buyer failed to push the December contract through resistance from $3.50. Today’s settlement held above the October low and above the 20-day moving average.   
   # Traders are spending some time pricing in adjusted expectations for the new South American crop.  Brazil’s Conab estimated that the country’s corn crop could improve by up to 25 percent over last year’s drought-damaged production season.  Conab estimated bean output of up to 104 million tons, or a growth of 9 percent over the agency’s 2015/16 estimate.
   # Argentina commanded some attention with analysts at the Buenos Aires Grains Exchange predicting a 36 million ton corn crop.  Farmers in Argentina are switching from soy to corn acres while the government this week confirmed that soybean export taxes would not be reduced by 5 percent this year as previously promised.  
   # Traders shrugged off another round of outstanding export sales.  USDA’s weekly report tallied new corn sales at 2.6 million metric tons, just more than 2 million for 2016/17 delivery.  Fresh soybean sales were also counted at over 2 million tons.  Both numbers beat the average trade guess by about 500,000 tons.
   # The export sales report was outstanding as a whole, but not particularly so for wheat.  Sales of 377,000 tons were near the bottom end of trade estimates and took some enthusiasm out of ideas recently developed over improved U.S. trade potential. 
   # A federal state of emergency was declared for Florida due to the threat of Hurricane Matthew.  The storm has been accompanied by wind speeds well north of 100 mph as it rotates around an eye that has not yet reached land.  
   # Seven straight higher days put WTI crude futures back over $50 per barrel for the first time since late June.  Wednesday’s stocks report found inventories down by more than anticipated with a draw of 3 million barrels.  Gains also continue to be built on speculation that OPEC will follow-through with a tentative plan to cut production in coming months.  
   # Outside markets promise to feature more action tomorrow after the government issues its monthly jobs report.  Non-farm payrolls are expected to rise by 175,000 while the unemployment rate remains unchanged at 4.9 percent.  

***** Live cattle futures down $0.42 to up $0.10; feeders moderately lower; hogs up $0.27 to $2.15. ***** 

   # Cattle traders put some minor effort into covering short positions but bearish fundamentals left buyers hesitant. The cash market has already developed this week at levels steady to $1 lower than the last benchmark.  Boxed beef was flat on the midday report.             
   # Higher pork prices encouraged a more considerable round of short-covering for hog futures.  Traders will need to see cash prices stabilize before any sustained fundamental buying is developed.