AgriVisor Morning MarketWatch

Friday, October 20, 2017
***** Corn futures fractionally firmer at the break; soybeans up 3 1/4 to 3 3/4 cents; Chicago wheat higher by 1 3/4 to 2 1/4. ***** 

   # The overnight session featured an active corn trade, but neither the buyers nor sellers could gain a clear advantage.  Soybeans were trading firmer on Brazilian weather worries.  
   # Fund traders remain on the short side of the corn market, but they have not shown a willingness to double down on the bearish bet.  Money managers are estimated net-short corn by about 150,000 contracts.  They remain net-long soybeans by about 50,000 contracts.
   # It has been mostly a dry week for growers in Brazil, compounding planting and crop development issues.  Next week’s forecast provides better chances for rain in the parched northern regions.  Traders will be keeping an eye on the situation closely knowing that missed rains next week would be a likely spark for grain markets. 
   # Farmers in Argentina are working under overly-wet conditions to try and plant this season’s row crops.  Heavy rain and flooding has delayed plantings and lowered production potential for the country’s wheat crop.   
   # The U.S. weather outlook remains largely unchanged and features rain in the Midwest through next Tuesday/Wednesday and then drier, cooler conditions to end out October.  
   # November soybean futures have cleared Thursday’s high and do not have much in the way of resistance before reaching $10.  The month’s high at $10.03 1/4 is also not far ahead of the market.  Points of support come in the form of the contract’s 10-day moving average and from this week’s $9.81 3/4 low.
   # Soyoil futures are leading the complex higher with support from better Malaysian palm oil prices. The latest data on palm oil exports signal improved demand for the product.  
   # Stock index futures are higher this morning with the Dow looking to build onto its recent record-setting move above 23,000.  Investors were pricing in better odds of a new tax deal and continue to cheer strong corporate earnings.       

***** Cattle futures vulnerable to a correction if support from a two-month uptrend gives way; hogs stretch into overbought territory. ***** 

   # Traders await this afternoon’s Cattle on Feed report.  Expectations for the report vary widely, but the average guesses are for placements at 108 percent, marketing 103 percent.    
   # Hog futures are enjoying support from technical buyers after the December contract bounced from its 10-day moving average earlier in the week.  A premium to the cash market leaves the board vulnerable from the fundamental perspective, but traders are turning more bullish on demand prospects.