AgriVisor Morning MarketWatch

Friday, October 28, 2016
***** Corn, soybeans, wheat futures all weaker by about a penny heading into the morning break. ***** 

   # Grain futures are mixed overnight on light volume.  Soybeans head into Friday up 30 cents for the week, corn up about a nickel, wheat flat.
   # A technical trade has been featured this week with soybean futures notably breaking out of their recent trading range.  A close over $10.20 for the November contract would help to confirm the move.  $12.38 is an upside retracement target on the continuous chart.  
   # December corn futures yesterday settled above their 100-day moving average for the first time since late June.  $3.59 1/4 is minor resistance here at the end of the week with few other points to provide pushback before the July high at $3.80.
   # Soymeal and soyoil switch positions overnight with the latter product the leader.  U.S. soyoil futures are up 6.5 percent in October with help from a surging Asian palm oil market.  Soymeal has only caught fire in the past few sessions as flooding in Argentina encouraged speculative buying.
   # The wettest areas of Argentina are expected to dry out over the next couple of days while spotty rains should develop throughout parts of Brazil starting early next week.  Most of Argentina maintains surplus moisture but the majority of Brazil continues to run short as growers in both countries head into corn and soybean season.    
   # The U.S. drought monitor shows pockets of dryness in hard red winter wheat country expanding.  A yellow spot has recently appeared on the map to indicate West Central Illinois becoming ‘Abnormally Dry.’
   # Traders were caught surprised by last week’s CFTC report showing funds having covered more corn shorts than expected.  An active week this week for the funds makes for a wide range of estimates regarding current positioning for the group of speculators.  CFTC will issue its Commitments of Traders report after today’s market close.  
   # GDP grew by 2.9 percent in the third quarter, better than the anticipated 2.5 percent gain.  GDP for 2Q was unrevised at 1.4 percent. Traders may use the numbers as reason to price in greater odds of a December interest rate hike.  

***** Live cattle futures look to build on technical momentum; hogs have $3.50 worth of gains through the week to try to protect. *****

   # Cattle traders see some upside potential following from beef prices being cheap enough to spark some increased consumer interest this fall.  Beef cutout values are about 20 percent lower than they were a year ago at this time.           
   # Hog futures are in the process of closing a gap on the weekly chart, leaving $47.62 as an upside target for the December contract.  On the fundamental side, better retail pork prices help margins enough to keep product flowing through the pipeline at a strong clip.