AgriVisor Morning MarketWatch

Wednesday, October 19, 2016
***** Corn futures down 2 to 2 1/2 cents and making new overnight lows; soybeans fractionally higher; Chicago wheat off 2 to 3. *****

   # October’s grain rally is sputtering but has not totally stalled yet.  Futures certainly do not display the same momentum that followed the rebound post report day.  Moderate price gains and accelerated harvest progress during the middle of the month have encouraged farmer selling to pick up.  Speculators are content to cover grain shorts but hesitant to open new longs. 
   # U.S. corn harvest will have crossed the half way mark by today.  The national harvest progress average is on a normal track, but a quick pace for Illinois and states east make up for laggards in Iowa and north.  Three-quarters of the soybean crop should be out by the end of the week.  
   # Fund traders spent a couple of sessions covering a large amount of their grain shorts after report day, but they remain comfortable holding bearish corn and wheat bets.  The large speculators are estimated net-short 115,000 corn and 125,000 wheat while net-long 75,000 soybeans.  
   # Traders will have an eye on the newswire at 8:00am central to see if any daily export sales announcements scroll across.  USDA’s reporting system yesterday announced a 705,600 metric ton sale of soybeans to China.  The deal will be marked down as one of the top 20 daily sales of the last 40 years, the largest being 2.9 million tons in 2012.
   # Grain futures were mixed to finish on China’s Dalian Commodity Exchange, corn up moderately and soybeans down fractionally.  Soymeal futures were higher.  Traders are keeping an eye on tightening soymeal supplies in China and thinking more U.S. soybean imports are likely to follow.  
   # Rains were limited to the far west and east ends of the Corn Belt overnight, welcomed by winter wheat growers where they fell in Nebraska and not a big issue for farmers in Ohio where row crop harvest is ahead of pace.  Rainy weather is expected to stick around in the East today and tomorrow before the pattern shifts wetter in the West 6-10 days out.   
   # WTI crude futures are higher this morning ahead of the weekly inventory report.  The consensus estimate has U.S. oil inventories building by 2 million barrels, but one analyst polled by Wall Street Journal anticipates a stocks reduction of 5 million barrels.           
***** December live cattle futures open with test of technical resistance from 10-day moving average; nearby hogs start with test of support from the contract low. ***** 

   # Cattle slaughters still run high, but producers’ efforts to keep current and take more heifers to market may allow beef production to decelerate quicker than anticipated. This week’s Cattle on Feed report will help give further fundamental guidance to market.     
   # Hog marketings also remain aggressive, keeping the meat market plentifully-supplied but helping to pull forecasts for peak production forward.