AgriVisor Morning MarketWatch

Thursday, August 31, 2017
***** Corn futures fractionally weaker at the break; soybeans unchanged; Chicago wheat up 1 1/2 to 2 1/2 cents. ***** 

   # Corn open interest dropped by 57,000 contracts on Thursday as traders exited September futures ahead of today’s First Notice Day. 844 corn contracts were issued for delivery. Open interest for December futures alone only gained by 1,500 contracts. 
   # The export sales report was a solid one all around.  Corn sales at 188,400 tons old-crop and 804,200 new were either at the top end or above pre-report estimates.  Soybean sales featured an addition to the old-crop ledger after it was a net-cancellation that was tallied last week.  New-crop soybean sales were a robust 1.56 million tons.  Wheat sales were at the upper end of the trade range at 536,000 tons.   
   # Fund traders are estimated net-short corn by about 65,000 contracts – same for Chicago wheat – are net-short soybeans by nearly 35,000 contracts.  
   # The commercial corn position has grown slightly shorter this week as elevators hedge the latest tranche of old-crop inventory.  Cash movement in the country will be expected to come to a halt again tomorrow once the new crop year rolls in. End users hedging on the long side have not been an active buyer yet on the way down for prices.
   # USDA’s Cash Grain Prices report listed Wednesday’s basis averages for Central Illinois at 22 cents under September futures for corn, 29 1/2 under the November for soybeans.
   # Corn futures are looking likely to finish a sixth straight week with losses as oversold technical measures fail to spark any buying interest.  This week’s move completes a 62 percent Fibonacci retracement of the long march higher out of last August’s low.  Further pressure on the board would put nearby futures up against that low at $3.01.  
   # Nearby gasoline futures reached above $2 this morning as the refining industry continues to deal with the impact of Hurricane Harvey.  Almost a quarter of the refinery capacity has been reduced by flooding and other storm damage.  Oil trades largely unaffected by the storm, if not a touch defensive because stock piles will be building without the same draw from refinery demand.  

***** Cattle futures look to start firmer; hogs likely to build on a technical rebound. ***** 

   # Cattle traders are taking note of improving wholesale beef prices.  Small strength for boxed beef comes after the recent price break left supplies priced attractive to domestic consumers and importers alike. Choice cuts register at 96.6 percent of last year’s values, select at 99.4 percent.             
   # Hogs made a technical rebound on Wednesday, nothing more.  Cash and wholesale markets continue to trend lower, so the fundamental landscape is still biased negative.