AgriVisor Morning MarketWatch

Tuesday, November 07, 2017
***** Corn futures down a penny ahead of the break; soybeans down 1 1/2 to 2 1/4 cents; Chicago wheat off 4. *****

   # Grains stay quiet in the lead up to the November crop report.  USDA will issue its supply and demand estimates on Thursday at 11:00 am central. The trade has formed consensus predictions that call for corn yield to come up by a little more than half a bushel.  The average soybean yield guess is 49.3 bushels per acre versus 49.5 from the October report.
   # Monday’s Crop Progress report found the U.S. corn harvest at 70 percent complete through Sunday, falling behind the 84 percent hauled in by this time last year.  Soybean harvest was pegged at 90 percent finished, which is on track with a normal pace.  Winter wheat plantings are at 91 percent and emergence at 75 percent.  Emergence has mostly caught up with the average except where they run 12 points in behind the average pace in Kansas.
   # Corn futures remain bound within a tight trading range with weakness in the last two sessions bringing the December contract down for tests of technical support at $3.45 1/4 and $3.42 1/2.  Upside generated from Thursday’s crop report would put CZ17 up against possible pushback from recent highs at $3.55 1/4, $3.58, and $3.62.
   # The export inspections report was a disappointing one for corn this week.  Shipments were 17.5 million bushels and make for a year-to-date total that falls short of the 2016 pace by 45 percent.  Soybean shipments were better, but cumulative inspections are behind last year by 9 percent.  Wheat inspections are down 6 percent on last year.
   # Oil futures are flat so far in the follow up to Monday’s move that put $1.71 onto the nearby WTI crude contract.  The latest round of buying results from news of political shakeup in Saudi Arabia.  The Saudi crown prince is leading an anti-corruption purge that has already led to the arrest of several key players in the oil industry.  
   # The dollar index is firmer this morning as it approaches its three-month high.  Expectations of rising interest rates in the U.S. contrast with rates staying low for longer in key economies like Europe and Japan.  In theory, the dollar as it is used by capital flowing into a U.S. treasury market that promises better relative return.      

***** Cattle futures vulnerable to selling after Monday’s bearish chart reversal; hog futures turning weaker technically as support from an uptrend gives way. *****

   # The cattle market has experienced a short-term squeeze that follows from strong margins for most packers and slim coverage for some.  Futures bulls were ready to take some profit off of the table at the start of this week, in part because of their knowing that big summer placements should production totals plentiful long through the seasonal buying campaign.      
   # Pork prices are keeping firm as packer margins improve slightly over last week.  Direct hogs were quoted $0.90 lower in the Western Corn Belt on Monday.  December futures head for a test of technical support at their 20-day moving average.