AgriVisor Morning MarketWatch

Monday, October 10, 2016
***** Corn futures fractionally higher; soybeans off 2 3/4 to 4 cents; Chicago wheat down 2 3/4 to 3 3/4. ​*****

   # Grains mixed as market participants price in weekend harvest activity and start to prepare for Wednesday’s crop report.  Much of the government is shut down for Columbus Day today, so no USDA reports.  
   # Plenty of harvest progress over a dry weekend in the Midwest.  Showers could pop up in the Western Corn Belt today; mostly dry Tuesday, wet again Wednesday.     
   # Pockets of dry soils in South Dakota are worrying for winter wheat growers.  The U.S. Drought Monitor tags a large portion of state’s western half as having long-term moderate drought conditions.  The drought maps also feature severe dryness throughout much of the Mid-South.  
   # Lower Asian palm oil prices serve as a drag on the soy complex this morning.  A report verified that palm oil exports out of Malaysia were down 20 percent in September to leave stocks up by nearly 6 percent.  Data covering exports over the first 10 days of October were also bearish.  
   # The early week grain trade promises to mostly feature position adjustments made in anticipation of Wednesday’s Crop Production and WASDE reports.  Analysts maintain a loose consensus of expecting USDA’s September corn yield of 174.4 bushels per acre to come down while the 50.6 soybean yield goes up.  They anticipate corn acres rising by 200-250k while soybean acres also rise but by a lesser amount.  
   # Chart traders have helped guide the grains in between the September 30 Stocks report and this Wednesday’s balance sheet update.  December corn made it over a key high last week before retreating from resistance at $3.50.  Bulls look to maintain support from Thursday’s $3.38 1/2 low.  November soybeans are choppy as the contract bounces around within a converging set of moving averages.  
   # China is thought likely to show up as a soybean buyer on the daily export reporting systems this week.  Traders there are back from a week-long holiday and still have fall needs to cover. 
   # Not much lingering reaction from Friday’s jobs report.  Traders expect that the disappointing employment numbers will take an interest rate hike off the table for November but affect very little the higher odds of a December adjustment.   

***** Cattle futures expected to have a sideways trade in store for the next several sessions; hog futures building on a potential corrective bounce.  ***** 

   # A high supply of market-ready cattle keeps the meat pipeline full and the product market on the defensive.  Beef exports are not currently taking much pressure off of the domestic market.  Sellers have shown a lack of conviction on opportunities to pull live futures below $100, but there is not enough buyer interest to allow for anything more than a mild correction.    
   # Pork demand is not overly weak; it is National Pork Month, cheaper retail prices are doing their job, and exports are doing enough to divert some meat from the domestic market.  Supply remains the big bear influence with slaughters and weights accelerating into what will be a high-producing fourth quarter.