AgriVisor Morning MarketWatch

Thursday, August 03, 2017
***** Corn futures down 3 1/2 cents at the break; soybeans drop 12 to 14; Chicago wheat off a nickel. ***** 

   # The latest weather market developments have grain futures trading sharply lower into the late morning hours.  
   # Starting with observed precipitation, North Dakota received wide rain coverage yesterday with many areas receiving 1” or more.  Showers fell over much of South Dakota but with less accumulated.  
   # The forecast keeps today wet for the Central Corn Belt.  Eastern Minnesota and Northern Wisconsin could possibly be inundated with heavy rains while 0.5-1.0” is projected for Northern Illinois.
   # A massive cooldown is expected to start this weekend and will likely run through the first half of August.  Above-normal rain chances are also given for the Midwest over the next 6-10 and 8-14 day outlook periods.  
   # Old-crop corn export sales were again disappointing this week at just 1.4 million bushels.  New-crop sales were fully anticipated.  Soybean sales were solid enough at 8.6 mbu old and 13.5 mbu new.  Wheat sales were poor at only 5.3 mbu.  
   # Today’s export sales report was an important one for analysts looking to make assumptions about potential soybean carryout revisions for the August 10 WASDE report.  A 25 million bushel reduction to old crop stocks is not out of the realm of possibility because of strong late-season soy exports.
   # The new-crop SX17/CZ17 futures multiple stands at 2.56 as it comes down slightly from strong move up out of an early-June low near 2.36.  A smaller-than-expected acres switch triggered the initial upswing for the ratio as recent weakness results from relatively better production prospects for soybeans.   
   # Open interest in the corn market was up another 10,800 contracts on Wednesday as traders funnel fresh capital toward bets on next week’s crop report.  Speculators are also finding the grain market attractive because of increased volatility that has followed from an active weather trade.  
   # Fund traders are still estimated net-long in the corn market by approximately 100,000 contracts.  The soybean bet remains bullish on balance but by less than 50,000 contracts.  Money managers are about split on positioning in the Chicago wheat market. 
   # The dollar struggles to find footing against its major currency pairings after a steep July slide.  Forex traders are pricing in reluctancy from the Fed to hike U.S. interest rates as they also recognize slightly-improved health in the Euro and U.K. economies.         
***** Live cattle up $1.67 to $1.80; feeders gain $1.07 to $1.45; hogs up by $1.22 to $2.15. ***** 

   # Cash cattle on the Fed Cattle Exchange averaged $116 on Wednesday’s auction to keep a small premium for cash to futures.  Lower beef prices are at least helping out to keep retail demand strong, but that source of support could fade if buyers stock up too quickly for late summer and Labor Day.  
   # Hog futures were helped by higher pork cutout values on Wednesday.  The cash market stays defensive and serves as a headwind, though.  This week’s futures trade is primarily a technically-driven affair, with October hogs bouncing out of oversold territory and today trying to build on a bullish reversal pattern.