AgriVisor Afternoon MarketWatch

Wednesday, October 12, 2016
***** Corn futures drop 7 to 8 1/2 cents; soybeans off about the same; Chicago wheat down 7 to 10 1/2. *****

   # USDA national corn yield estimate dropped from 174.4 bushels per acre to 173.4 versus an average trade guess of 173.5.  Analysts were surprised to see both Illinois and Iowa yields rise by 2 bushels per acre apiece, to 202 and 198.  The national average was reduced by way of cuts to yield estimates for the likes of Nebraska, Michigan, Ohio, and most notably, Indiana – down from 185 to 177.  
   # Soybean yield was revised up, as expected, from 50.6 to 51.4 bushels per acre.  Illinois and Indiana both up 1 to 62 and 59, respectively; Iowa unchanged at 58.
   # Harvested acres were up for corn, from 86.55 to 86.84 million, a touch more than anticipated.  Soybean acres were flat at 83 million harvested.
   # Yield estimates for both corn and soybeans were slightly smaller than expected and therefore so were the carryout estimates.  Bigger export targets for both crops helped out, those up 50 million for corn, 40 million for soybeans.  
   # Only small changes were made for world production numbers, but for a significant 1 million tons added for Brazilian corn and 1 million added for Brazilian soybeans.  The Australian wheat crop grew by 800,000 tons to the surprise of many.  
   # Futures market reaction was initially positive; final settlements were not.  Without enough motivation to push December corn futures above $3.50, traders turned to selling.  Corn carryout comfortably north of 2 billion bushels was deemed nothing to be bullish about.  Soybeans followed corn lower with enough help from its own yield bump.
   # This may be an October report that has the potential to be forgotten rather quickly.  USDA estimates as a whole did not deviate largely from expectations.  Market participants are likely to turn focus back to harvest progress before soon shifting attention to demand and South American production.  
   # Nothing overly exciting to report from outside market action with the economic calendar blank today.  Oil traded lower but ahead of $50 per barrel still.  The dollar index inched higher while treasury yields firmed.  

***** Live cattle futures drop $0.75 to $1.10; feeders down $1.47 to $2.12; hogs up $0.65 to $1.27. ***** 

   # Midday gains for cattle futures were erased by selling pressure that accelerated into the close.  Sub-$100 cash deals were reported to help weigh on the market. The WASDE report featured small upward revisions for beef production in the fourth quarter and for 2017.  
   # Sentiment in the hog market is showing tenuous improvement as the futures market works to carve out a bottom.  The Supply and Demand report included bearish adjustments to production.  USDA analysts mentioned potential for higher export demand from Asia.