AgriVisor Morning MarketWatch

Thursday, August 10, 2017
***** Corn futures fractionally firmer at the break; soybeans up 4 3/4 cents; Chicago wheat up 1 to 2. *****

   # U.S. corn yield receives first glance today.  The average trade guess calls it 166 bushels per acre but some analysts are as low as 162 and as high as 168.5.  
   # An addition to old-crop corn carryout that results from lower ethanol usage would come as no surprise to market observers.  Bigger carry-in would be more than offset by smaller new-crop output to leave new-crop endings stocks down from previous estimates.  The trade guess for 2017/18 U.S. corn carryout is right on 2 billion bushels.
   # Traders look for only a small reduction to the USDA’s 48 bushel per acre trend line soybean yield estimate.  An old-crop export addition is expected to help smaller new-crop production whittle away from both carryout estimates.  Old- and new-crop soybean carryout estimates are predicted at 401 and 424 million bushels, respectively. 
   # Another pair of production cuts for the U.S. spring and durum wheat crops is expected to come today.  All wheat production expected at 1.711 billion bushels would be down more than 25 percent on last year. 
   # Key CZ17 price levels to watch are $3.74 for the bottom and $4.00/$4.17 1/4 for the top.  $10 is resistance for SX17 while only $9.50 provides much support above the June low at $9.07.
   # Fund traders head into the report with net long grain positions – corn by about 100,000 contracts, soybeans by 25,000, and wheat by less than 10,000.
   # The crop report will be followed by another key set of numbers.  The FSA will issue an update on acreage after then market closes.  
   # Today’s data will take a few sessions to fully digest, but soon enough it will be back to weather.  The short-run forecast is cool and wet for most of the Midwest and the 6-10 and 8-14 day outlook predictions are the same.    
   # Investors are approaching the stock market with caution after President Trump’s comments about the “fire and fury” that would be directed at North Korea if that country does not cease making nuclear threats.  Gold is rising as the primary resulting risk play.   
***** Cattle futures look to start steady to firmer in correction from oversold territory; hogs likely to open with technical pressure. *****

   # Cattle futures followed the cash auction lower on Wednesday.  Animals on the Fed Cattle Exchange were auctioned off at an average of $115.  Boxed beef prices were steady on the day.  October live closed lower for a fifth straight session and now reach into technically oversold territory.      
   # Hog futures have turned somewhat quiet.  The October was turned away by technical resistance from its 50-day moving average but held gains for the day.  Cash activity was limited and the pork cutout averages were flat.