AgriVisor Morning MarketWatch

Wednesday, September 06, 2017
***** Corn futures down 3/4 to 1 3/4 cents at the break; soybeans fractionally weaker; Chicago wheat off 1/4 to 5 1/2. *****

   # USDA issued its latest Crop Progress report on Tuesday afternoon.  The U.S. corn crop was called 61 percent Good or Excellent, down one point from the previous week and well behind last year’s 74 percent G/E.  The Illinois corn crop is tagged 54 percent G/E versus 85 percent last year, Iowa 62 percent versus 83 percent last year.  Soybean conditions were unchanged on the week at 61 percent G/E.  
   # Further fund short covering helped rally the grains out of the gate this week.  The managed money traders are estimated net-short corn by 60,000 contracts, net-short soybeans by 15,000, and net-short Chicago wheat by 60,000.  
   # A strong rally for November soybeans on Tuesday put the contract up onto its upper Bollinger Band with a settlement that also matched a 38 percent retracement target. Potential resistance comes from the 50-day moving average that is currently rising from $9.71.  The August report day high at $9.88 1/2 is a key upside objective.    
   # USDA’s Cash Grain Prices report marked Central Illinois producer basis averages at 36 cents under December futures for corn and 31 1/2 cents under the November for soybeans.  The Interior Iowa corn and soybean basis averages were 53 and 61 cents under, respectively.
   # Industry analysts are submitting yield estimates to journalists at the major newswire services today.  Expectations for USDA’s September 12 Crop Production and WASDE reports will start to circulate more fully by Thursday and Friday.  In 2016, the government’s September corn yield estimate dropped from 175.1 bushels per acres to 174.4 bpa while the soybean yield prediction jumped from 48.9 to 50.6 bpa.  
   # U.S. crude oil futures make another step toward $50 a barrel as another hurricane spins in the Atlantic.  The storm is a threat to oil production in the Gulf of Mexico and to infrastructure throughout the coastal regions.  
   # Hurricane Irma is about to batter the U.S. Virgin Islands on its way to a Wednesday night meeting with Puerto Rico.  Irma’s projected path has shifted westward and could hit the southwestern tip of Florida as a Category 4 storm by late in the weekend if the storm is not first broken up by run ins with islands in the Caribbean.  
   # Stock futures are firmer and gold relaxes back just a little, but the broad market still features a risk-off tone that follows from an uncertain U.S. political climate and fears over further trouble with North Korea.  Economic worries over hurricane losses are a cloud over the U.S. while contentious Brexit negotiations are an obstacle for Europe.      
***** Cattle futures look to open steady/firmer; hogs higher on follow-thru buying. ***** 

   # Technical traders see $100 as an objective for live cattle futures, but fundamental buyers are stepping in to respond to better price action in the beef market.  Beef prices are still even or under their year-ago levels and may be attractive enough to keep the domestic consumer interested into fall.  Most optimistic is a strong export program that will only improve if the dollar continues to settle back.           
   # Pork packer margins have improved and allow futures to do some of the work in catching up with the cash.  October hog futures have retracement potential to put the contract on a path toward $67.