AgriVisor Morning MarketWatch

Thursday, October 19, 2017
***** Corn futures up a penny at the break; soybeans up 1/2 to 1; Chicago wheat up 1. *****

   # It’s another quiet overnight session for the grains.  Traders had been waiting for the export sales report while otherwise looking to the weather forecasts for direction.  
   # Export sales were solid this week, if just a touch light for soybeans.  New soybean sales were 1.28 million tons.  China is said to be an active buyer as of late, so we’ll watch for related sales to flash across the USDA’s daily reporting system.  Corn bookings totaled 1.25 million tons versus expectations of around 1 million.  Wheat sales were better than anticipated at 615,000 tons.   
   # Wednesday was dry across the Corn Belt and today looks like it will turn out the same way.  Storms are expected to develop in the Western Corn Belt on Friday to stir up wet weather that will likely stick around in the Midwest through the middle of next week.  The 6-10 day outlook suggests conditions will clear up again over that timeframe.  
   # Fund traders continue to press the short side of the corn market after having built a net-short position of an estimated 150,000 contracts.  Money managers remain net-long soybeans by about 50,000 contracts.  Their bearish bet on Chicago wheat is growing and is now thought to exceed 75,000 contracts.
   # NAFTA talks have been extended into next year after the first few rounds of negotiation have ended in stalemate.  Representatives from the U.S., Mexico, and Canada will have one more shot in November to move the ball forward this year on terms for the trade partnership.
   # The last week of October will be an important one for growers in Brazil.  Meteorologists are saying that week provides the next best shot for a significant rain event to develop over the dry central and northern croplands. Planting progress throughout most of the region falls well short of half the normal pace because of the hot, dry conditions.        
   # Biofuels are back in the news today after President Trump assured Iowa Governor Kim Reynolds that the ethanol mandate had his support.  Traders are also waiting for the other shoe to drop regarding confirmation of penalties levied against Argentina and Indonesia for the dumping of biodiesel into the U.S. market.  
   # Outside markets will digest a positive jobs report that listed unemployment claims at 222,000 versus a consensus estimate of 239,000.  The major stock indices are coming off another record day on Wednesday, but investors may be taking on small concern over political risks related to ongoing contention over issues like taxes and healthcare reform.  

***** Cattle futures vulnerable to a correction if support from a two-month uptrend gives way; hogs move up toward a test of the month’s high. ***** 

   # Cattle futures are enjoying support from a firm wholesale beef market that in turn sparks optimism for a higher cash market direction.  Choice and select beef cuts are averaging 8 and 10 percent above their year-ago values, respectively.  The cash trade will develop this week around a bid/offer near $112/114 live.    
   # December hog futures are finding guidance from the chart, with Tuesday’s $61.97 - $64.50 range serving support and resistance to the contract.