AgriVisor Morning MarketWatch

Monday, November 13, 2017
***** Corn futures down 2 cents ahead of the break; soybeans off 3; Chicago wheat down a nickel. ***** 

   # Grains trade with a weaker bias on relatively light overnight trading volume.  December corn futures haven’t found a buyer above Friday’s $3.44 high.  Wheat futures again fail on a lack of upside follow-through.  Weaker Asian palm oil prices pull on Chicago soyoil futures.   
   # Favorable weekend weather in Brazil helps leans on U.S. grain prices this morning.  Rainfall coverage has widespread throughout the country over the previous few weeks and soil moisture deficits are shrinking in the key northern growing regions.  Growers in many parts of Brazil will still have to worry about yield troubles for late-planted crops, especially if a La Nina is to develop in such a way that brings the rainy season to a quick close.  
   # A small round of showers is in the Midwest forecast for Tuesday/Wednesday before bigger storms show up in the outlook for Thursday.  The Eastern Corn Belt will continue to lean wetter relative to the western half.  Temperatures are to run mostly cooler than average over the next two weeks.
   # U.S. exporters are hoping to find some business from China this week as the top bean buyer is seen to be enjoying profitable crush margins.  U.S. soybean sales are currently behind last year’s pace by 15 percent as big supplies left over in Brazil satisfy a larger portion of Chinese purchases this season.  USDA estimates China will take in a record 97 million tons of soybeans altogether this year, a number that would represent a 3.7 percent improvement over last year.    
   # This afternoon’s Crop Progress report should show U.S. farmers having completed just more than 80 percent of the corn harvest through Sunday.  The crop was 93 percent picked as of November 14th, 2016.  Soybean harvest should come in above 90 percent done.  
   # The release of the Friday CFTC trader positions report was delayed until this afternoon due to the Veteran’s Day holiday. Not included in the numbers are last Thursday’s trades, when hedge funds brought their corn position to or just past the record net-short of about 230,000 contracts.  The large speculators have been working with a net soybean long that fluctuates in the range of 45-60,000 contracts.     
   # The dollar is staying firm against majors like the euro and yen while it also gains ground against currencies held by some of our grain export competitors like Brazil and Russia.  A weakening Brazilian real has improved trade terms for Brazilian soybean shippers and encouraged farmer selling; same for the Russian ruble and wheat.

***** Livestock futures expected to make a recovery bid after putting behind a rough week last week. Hog futures have closed lower in all of the previous eight sessions. ***** 

   # A weaker cash cattle market turns futures defensive.  Beef production has tapered off slightly, but the scramble for coverage by packers also looks to be largely over with.  Technical buyers may look to defend retracement support provided to December live cattle, but would be likely to turn into sellers if the contract breaks below trend support.
   # Cash hogs have turned softer in part due to anticipation of the wholesale market breaking down.  The expectation is for product to be comfortably supplied well into the new calendar year as slaughters stay high and weights stay heavy.