AgriVisor Afternoon MarketWatch

Wednesday, November 02, 2016
***** Corn futures down 2 to 2 3/4 cents; soybeans off 6 to 7 1/2; Chicago wheat up 2 to 3 1/2. *****

   # Focus for the November 9 crop report remains on USDA yield adjustments.  Trade guess averages should likely look for corn yield to drop by about 1/2 bushel per acre while the bean yield is expected to rise by that amount.
   # Strong export demand has grain traffic on the rails at record levels.  Coal and petroleum rail loadings are off about 25 percent year-to-date and present less competition for rail cars and power.         
   # Corn production was down 20 percent in Brazil last season after the country’s second crop was hampered by drought.  Much of Brazil still runs short of moisture and a slow start to the rainy season is cause for some worry, but analysts expect USDA to leave its 2016/17 corn output estimate at around 83 million tons, or 25 percent larger than the last short crop.
   # While drought inflicted damage on the Brazilian safrinha crop, flooding was the issue for Argentina’s soybeans late in the season.  Similar to the way dry conditions are still a concern for growers in Brazil, wet weather is currently getting in the way of planting efforts in Argentina.  Soybean sowings in Argentina are likely only around 5 percent done when normally double that by now.
   # A good showing for corn grind with 107 million bushels used to produce a little more than 1 million barrels of ethanol per day last week.  Total weekly corn grind needed to meet the USDA’s 5.275 billion bushel marketing year target is now near 101 million bushels.      
   # Corn export commitments are up on the year with Mexico picking up where it left off the last marketing season as top buyer.  Japan follows behind Mexico on total purchases but the Asian buyer has booked about 50 percent more corn than it had by this time a year ago.          
   # Volatility in outside markets has been climbing since the news of Hillary Clinton’s email investigation being reopened has tightened the presidential race.  Traders loosely agree that uncertainty associated with a Trump win presents greater potential for post-election market fallout. 
   # No Fed funds rate hike, as expected.  The FOMC meeting ended today with just two Fed presidents having voted for an adjustment.  A small uptick in the inflation rate and an improving labor market are seen to be supportive of a likely December interest rate increase.     

***** Live cattle futures flat; feeders $0.40 to $1.25 higher; hogs up $0.92 to $1.37. *****

   # Cattle futures were back and forth as traders waited for some guidance from a cash market that has yet to develop.  Beef cutout values were up for another day to help lend futures support.  Choice cuts are up about $5 over one week.  
   # Hog slaughters are still high but packers are keeping up, encouraged by strong margins.  December futures have been turned away by resistance from their 50-day moving average in each of the previous three sessions.