AgriVisor Afternoon MarketWatch

Monday, July 24, 2017
***** Corn futures drop 2 1/2 to 2 3/4 cents; soybeans off 11 1/2 to 12 1/4; Chicago wheat lower by 9 to 10 1/2. *****

   # Grain futures gapped lower after weekend rains were widespread throughout the Corn Belt.  Contracts bounced from session lows as the latest runs of weather forecast keep the Midwest dry over the next two weeks.  
   # Weekly export inspections were down on the week for corn at 37 million bushels.  Corn inspections year-to-date have reached 92 percent of the USDA’s goal for the marketing year.  Soybeans inspections were strong on the week at 22 million bushels with cumulative shipments standing 17 percent higher than a year ago.  
   # Traders were looking for a drop of one to two points to come out of this afternoon’s Crop Progress report for corn, soybeans, and wheat.  Last week’s Good/Excellent ratings were 64 percent for corn, 61 percent soybeans, 34 percent spring wheat.    
   # Hedge funds were active sellers early in the session, but some money managers turned into buyers late in the morning hours.  Their positions are estimated to be net-long by roughly 100,000 contracts of corn, net-long soybeans by about 40,000 contracts, and net-long Chicago wheat by 35,000 contracts.  
   # The latest run of the U.S. weather model has forecasted rain totals running lighter than the earlier iterations.  Totals of up to 1.5 inches are still predicted for parts of central Minnesota and eastern Iowa over the next three days.  The 6-10 and 8-14 day outlook maps both lean drier and cooler than normal.
   # Expectations for grain crops in Europe are being lowered as various parts the continent continue to suffer from drought.  Notable dry spots include those in northwestern Germany, Romania, and Ukraine.    
   # Chinese officials have cleared the way to allow imports of U.S. rice for the first time.  China is the world’s biggest consumer of rice and is projected to import 5 million tons in 2017/18.  The U.S. normally exports more than half of its annual rice production.
   # Crude oil futures bounced on ideas that OPEC producers may be willing to tighten supplies further.  Data have recently shown Saudi Arabia to have cut back on oil exports to the U.S.  

***** Livestock futures expected to start lower in response to an unfriendly Cattle on Feed report from Friday afternoon. *****

   # Cattle were pushed sharply lower at the start to confirm the bearish bias that had developed after Friday’s on-feed report.  Placements were sharply higher than anticipated as earlier expectations of feeder crop size are shown to have been too light.  Producers have been placing cattle early, in part due to poor pasture health, so lower weights may continue to keep production from rising too quickly.             
   # The hog market was pressured by selling spilled over from the cattle market.  Cash and wholesale weakness also contributed to softer hogs on Monday.  The afternoon Cold Storage report may lend some support after it showed pork stocks down 4 percent on the year behind belly inventories that were down 65 percent on last June.