AgriVisor Afternoon MarketWatch

Wednesday, September 27, 2017
***** Corn futures up 1 1/2 to 2 cents; soybeans higher by 1 1/2 to 2 1/4; Chicago wheat rallies 6 to 7 3/4. ***** 

   # Today’s session turned into a relatively active one as grain futures reversed out of early morning lows.  Traders were busy preparing for Friday’s reports, some paring risk and others adding new bets.  
   # Fund traders ended up covering a small chunk of their short corn bet, ending the session with a net-short of just above 100,000 contracts.  The large speculators were back and forth on a soybean position that hovers around even.  Short-covering continued in the wheat market with a position that is bearish by about 50,000 contracts in Chicago.  
   # Ethanol production was down a sharp 3.6 percent on the week.  Seasonal weakness for ethanol output was mostly anticipated.  Corn grind was an estimated 99.9 million bushels versus 103.6 in the previous week.   
   # Traders will be eager to see the Thursday morning export sales report.  Estimates for new weekly sales include 650,000 tons of corn, up to 2 million tons of soybeans, and 350,000 tons of wheat.  Sales are lagging well behind last year’s pace, but soybeans are catching up. 
   # Soyoil futures have turned defensive on news that the Environmental Protection Agency is considering a lowered biodiesel blending mandate.  The government group has opened a comment period on the subject.  This development comes after bullish enthusiasm was recently stoked by the imposing of new tariffs on biodiesel imports from Argentina and Indonesia.  
   # Significant harvest progress will be expected in the Eastern Belt over the next week as the forecast provides mostly clear skies for the region.  What is not ready to pick yet will be helped out by temperatures expected to run warmer than average over the bulk of the next two weeks.
   # Oil futures were a little higher on the day with continued support from OPEC production cut expectations.  The major U.S. stock indices were better on the session behind strength from the banks and from a strong rally for Google shares. Commodities mostly ignored another strong move up for the dollar index, which is rebounding on the perception of a tighter monetary stance coming from the Federal Reserve.       

***** Live cattle up $0.30 to $1.42; feeders gain $1.82 to $2.87; hogs steady to $1.55 higher. ***** 

   # Traders were fading the initial reaction to last week’s bearish Cattle on Feed report.  December live cattle moved back above its 100-day moving average on its way toward the chart gap that was opened on Monday. The fundamentalists are watching that contract closely because of its premium over the cash market and are looking for this week’s cash trade to provide the market better direction.          
   # More spreading for the hogs today with December futures gaining on the nearby October.  Last week’s Cold Storage report showed current pork inventories to be plentiful enough to satisfy near-term demand, with freezer up four percent on the month.  December hogs are benefitting from technical strength as buyers follow through on Monday’s reversal.