AgriVisor Afternoon MarketWatch

Thursday, October 13, 2016
***** Corn futures up 11 to 12 1/2 cents; soybeans higher by 9 3/4 to 11 1/4; Chicago wheat gains 17 to 19 1/4. *****

   # Wheat futures led the grains higher on a rally that broke out from the topside of month-and-a-half trading range.  Several attempts by short sellers to sustain a move below $4 have failed, so some are covering positions and trying the other side of the bet.
   # Other traders would point to a few friendly fundamental developments for the wheat strength.  World wheat trade business has become more active in recent weeks with Saudi Arabia in the market, Asian buyers looking to make deals, and the U.S. actually showing up on the offer sheet for an Egyptian tender.  
   # High of the day was $3.49 3/4 for December corn futures, so $3.50 stands as resistance.  Above that psychologically-important mark stands little else in the way of chart pushback until the 100-day moving average (drifting down from $3.60 1/2) and the July 14 high at $3.80.  
   # Freight rates continue to be volatile along with the ebb and flow of U.S. harvest.  Big crops have demand for barge and rail space robust, but grain shippers are being met with ample supply of cars and boats as they deal with less competition from the coal and petroleum industries.  Year-to-date grain inspections are up by a third of last year’s total while combined coal and petroleum product shipments are down by a quarter.  
   # Farmers in the Midwest should enjoy a dry couple of days before the 6-10 day forecast has odds of rain increasing.  Temperatures are expected to run warmer than average through the rest of the month.
   # Most growers in Brazil are unlikely to mind some planting delays over the next few weeks as expected rains will help to restore moisture to dry soil.  Still, Southern Brazil and Northeast Argentina may yet suffer from net-drying as the region currently maintains a good deal of worry over drought conditions.
   # Ethanol production was down for another week, this time by about 2 percent.  Corn grind was down to below 100 million bushels with about 101.2 million needed per week to meet USDA’s current 5.275 billion bushels.  
   # The currency market was showing some signs of stabilization today in that the dollar was down against a recovering pound and euro.  Higher odds of a U.S. interest rate hike have combined with resurfacing worries about the health of European economies to send buyers toward the dollar lately.     

***** Live cattle futures down $1.57 to $2.30; feeders off $2.55 to $3.05; hogs up $0.12 to $0.27. *****

   # Sellers followed through on the move that has pulled live cattle futures below $100.  Fundamentally, traders point to an adjustment of the futures curve relative to a cash market that also slipped below $100 this week.    
   # Hog futures have made three straight higher closes, the first time doing so in more than a month.  Wholesale pork cuts were up on average today to help out; however, there is little hope for a sustained futures correction without stability for cash hogs, which slipped further today.