AgriVisor Morning MarketWatch

Friday, August 04, 2017
***** Corn futures up 2 1/2 to 3 cents at the break; soybeans up 1 to 3; Chicago wheat higher by 2. *****

   # December corn futures are up testing the $3.81 1/4 high from Wednesday and Thursday.  The contract has so far managed to avoid a breach of its six-month low at $3.74. Upside targets include a gap that would be closed at $3.86 1/2 and a 38 percent retracement target at $3.91. 
   # Rain coverage extended from the eastern half of Iowa into Illinois and Indiana on Thursday afternoon.  Totals mostly averaged under 1/2.”  Today’s forecast leaves the Midwest dry but provides chances for light showers in Plains.  
   # The 6-10 day outlook stays cool but has turned a little drier for the upper Midwest in its latest runs, same for the 8-14 day.  
   # Thursday’s release of the U.S. Drought Monitor showed improvement in conditions for Illinois, with only a small stretch of the state’s west-central region being tagged “Abnormally Dry.”  Iowa’s drought intensified with affected area growing to 67 percent.  “Exceptional Drought” remains in the western halves of the Dakotas after recent rains there have been biased east.
   # Industry estimates for next week’s crop report are now circulating.  Analysts’ average guess for corn yield is 165.9 bushels per acre versus the 170.7 USDA currently has stuck in the balance sheet.  Soybean yield is predicted at 47.4 bpa.  
   # Brazilian grain truckers may be headed back to the picket line in another round of protests against low wages.  Disruption at the ports would delay exports at a time when the country’s corn export program is normally starting to ramp up in a big way.  
   # Fund traders are still estimated net-long corn by about 100,000 contracts.  The managed money soybean net-long is near 40,000 contracts, Chicago wheat near even. 
   # The jobs report was a beat with July nonfarm payrolls up 209,000 versus a consensus estimate of +180,000.  The unemployment rate stated unchanged at 4.3 percent while average hourly earnings gained 0.34 percent to $26.36.

***** Cattle futures look to open steady/firmer; hogs start with potential technical pressure. ***** 

   # Cattle futures are finding some support from a cash market that has firmed up late in the week.  Cash near $118 leaves a small premium over October futures at $115.  Packer margins are holding up well enough as the boxed beef slide slows.      
   # Hog futures are pressured by weaker cash and wholesale markets, but production may not be ramping up by quite as much as earlier feared because of weights coming down.  Pork exports are still running strong to help out on the demand side.