AgriVisor Morning MarketWatch

Wednesday, August 02, 2017
***** Corn futures up 4 to 4 1/2 cents at the break; soybeans higher by 7 1/2 to 8; Chicago wheat up 4 1/4. *****

   # Grains bounce overnight on relatively active trading volume.  Weather is on balance slight price negative, but expected damage done already to yield potential and the resulting lower supply forecasts lend support.
   # Open interest rising by more than 23,000 contracts on Tuesday’s corn market rout looks to indicate new sellers stepping into the market and not just short-covering from the funds.  Soybean open interest rose by only about 2,500 contracts.  
   # November soybeans enjoy a technical bounce after closing under their lower Bollinger Band on Tuesday.  The Tuesday tumble completed a 50 percent retracement of the move up from late-June to early-July.  Chartists have an eye on a gap open from $9.58 to $9.63.   
   # Light scattered showers gave no more than a tenth or two to growers in central Illinois yesterday afternoon.  Rains were developing in western North and South Dakota just a few hours ago with storms expected to strengthen as the day goes on.  Rain is in the forecast for the far Western Corn Belt and far ECB Thursday and Friday, but Iowa remains on the periphery of coverage areas.
   # The 6-10 day forecast stays cool while its latest run splits chances of precipitation between an above-normal bias south and below-normal north.  The 8-14 day looks much the same.  
   # USDA reported June soybean crush at 154 million bushels, down on the month but comfortably above the average trade guess near 147 mbu.  A monthly drawdown was observed for both meal and oil stocks.  
   # Along with an ADM earnings report on Tuesday came news that the grain processing and trading company will be repositioning an Illinois plant away from ethanol and over to other industrial products amid the tightening of ethanol margins.     
   # The Environmental Protection Agency met with industry leaders on Tuesday to discuss Renewable Fuel Standard recommendations for 2018.  Up for substantial potential change are blending requirements for biodiesel.  A court ruling last week found that EPA had erred in their 2015 proposals because they did not meet initial targets established into law by RFS.
   # The major U.S. stock indices look to reach for fresh records again today.  Apple will help buoy the market after achieving a strong third-quarter earnings beat on Tuesday afternoon.  Electric car-maker Tesla is on the earnings calendar today.  

***** Live cattle look to start steady/firmer; hogs the same with technical support. ***** 

   # Cattle futures will find some guidance from trade on the Fed Cattle Exchange today.  Cash prices are so far showing softer again this week after dipping $2-$3 last week.  Marketings are ramping up but favorable weather is keeping grilling season strong in the lead up to summer’s end.     
   # A big hog slaughter is helping to quickly replenish stocks as seasonally-softer demand helps do the same.  October hogs’ drop under its 200-day moving average on Monday triggered fresh technical selling on Tuesday, bringing the contract to a new 3-month low but also into oversold territory.