AgriVisor Morning MarketWatch

Thursday, October 27, 2016
***** Corn futures fractionally higher at the break; soybeans down 1 1/2 to 2 1/2 cents; Chicago wheat steady to up 2 3/4. *****

   # Grains follow through to the upside with corn an overnight leader.  November soybean futures trade above their 100-day moving average for the first time since July and stand with gains of more than 60 cents through the month of October.  
   # Soybean export sales were as strong as advertised at 2.05 million tons this week.  Corn sales were on the light side relative to pre-report estimates at 800,000 tons.  Wheat sales were solid at 646,000 tons.   
   # Fund traders are back to being net-long soybeans by more than 100,000 contracts, encouraged to be buyers by positive chart indicators and wanting to take on some risk that would be rewarded by any adverse weather developments in South America this winter.  The large speculators have pared down their net corn short to something near 60,000 contracts.  
   # The Midwest is expected to dry out today after a few tenths were collected throughout much of the region yesterday.  Totals were locally heavier in northern Illinois/southern Wisconsin where farmers still have harvest left to complete. 
   # Heavy rains in Argentina are a threat to quality of the country’s wheat crop and get in the way of row crop planting efforts.  Nearby, farmers in southeastern Brazil are happy to have the rain, but their neighbors throughout the rest of the country still suffer from a shortfall of moisture. 
   # The Australian Bureau of Meteorology issued its latest update on La Nina earlier this week.  Various tells of La Nina have developed, but the Bureau still has only two of eight models that generate a call for La Nina’s development over the next few months.        
   # Grain traders have been keeping a closer eye on currencies lately.  A falling British pound was encouraging capital to flow to the dollar earlier in the month.  A weak Chinese yuan and worry about further devaluation puts to question how the move will impact the importer’s soybean buying interest.  The dollar trade will continue to have guidance from ever-changing odds on a December Fed funds rate hike.  
   # In a round of economic reports released this morning, new U.S. jobless claims were down slightly on the week to 255,000; durable goods orders were down fractionally but not quite as much as anticipated.  Third quarter GDP will be reported tomorrow.   

***** Live cattle futures find support from a higher cash trade; hogs futures open with a test of the month’s high. ***** 

   # Cattle futures maintain some corrective momentum in follow-up to last week’s friendly Cattle on Feed report.  Futures are now running into chart resistance with the December live cattle contract up against its 50-day moving average.  Firmer cash prices trading this week help boost fundamental sentiment.         
   # Hog futures are still working on a technical correction while the market fundamentals remain bearish.  A high production pace has cash and wholesale prices on the defensive.