AgriVisor Morning MarketWatch

Tuesday, August 29, 2017
***** Corn futures down 2 cents ahead of the break; soybeans off a nickel; Chicago wheat down 3. ***** 

   # Grains are lower in the overnight trade as all markets take a risk-off posture.  Investors are turned slightly skittish after North Korea fired a missile that flew over Japan.  No official response yet from the U.S. government.  
   # Thunderstorms rolled through the Eastern Corn Belt on Monday evening and continue to support crop finishing.  The two week maps still lean drier west, wetter east, cool throughout.  The possibility of an early frost/freeze event is becoming a small concern for the market. 
   # The Crop Progress report was surprisingly no help to the corn market, even with it showing no improvement for crop conditions last week.  Corn was rated 62 percent Good/Excellent again, down from 75 percent last year.  Illinois was down to 52 percent G/E from 54 percent last year and 85 percent a year ago. Dough stage was estimated to have been reached by 86 percent of the corn crop, a pace near the average.  Dent progress was pegged at 44 percent versus 57 percent last year and 51 percent the five-year average.  
   # Soybean crop ratings improved by one point to 61 percent G/E versus 73 percent a year ago.  Illinois was down three points to 57 percent, Iowa up two to 60. 
   # Crop ratings still fail to improve toward what most would expect them to be given the USDA’s yield estimates.  The survey-based USDA corn yield at 169.5 bushels per acre for August 2017 compares to 175.1 in August 2016, or down 3.2 percent on the year.  The composite Good/Excellent crop rating score is off 17 percent over last August for corn. 
   # Fund traders remain the most active seller of the grains.  They are holding net-shorts in corn, soybeans, and wheat of an estimated 50,000, 30,000, and 65,000 contracts, respectively.  
   # Egypt has issued a tender for wheat.  The offer sheet will be much anticipated as traders look to see first where Russia and the other Black Sea shippers are priced and next to see if U.S. wheat is positioned competitively after the recent break for futures.  
   # U.S. officials will travel to Mexico City on Friday for round two of negotiations over NAFTA.  Round one in Washington ended with President Trump indicating that the meetings did not go well.  All countries have entered into non-disclosure agreements, so details of the talks are so far largely unavailable.    

***** Cattle vulnerable to resumed selling as nearby futures reach a test of technical resistance; hogs look to open steady/firmer. *****

   # Cattle futures were assisted early this week by friendly numbers from the latest Cattle on Feed report.  After placements were increased significantly this summer, the availability of young animals is tightening.  Still, traders are not likely to get too excited until more is known about the direction of cash prices this week.  
   # Hog futures are trading weaker behind bearish technicals, but a reach into oversold territory should be expected to help stem losses.  A small recovery for the cash and wholesale values early in the week would likely go a long way in helping futures to stabilize.