AgriVisor Morning MarketWatch

Wednesday, November 15, 2017
***** Corn futures fractionally firmer ahead of the break; soybeans up 3 3/4 cents; Chicago wheat down 1 3/4. ***** 

   # Corn futures trade a tight range with spreading having generated a large portion of the overnight activity.  Soybeans started higher and stay that way for now.  Chicago wheat was quick to give back Tuesday’s gains.
   # This week’s corn and soy tumble have been attributed to hedge fund selling.  Monday’s break below various levels of technical support triggered the liquidation of fund soybean longs before Tuesday’s campaign ended with money managers reaching a record net-short position in the corn market.  A strong seasonal uptrend for soybeans may stem fund selling there while the size of bearish corn bets could trigger some short-covering in that market.    
   # Chinese demand worries have turned into a source of selling in the commodity space this week.  Weak economic data out of China is concerning for the country’s consumption potential and puts a pallor on the outlook for particular imports, including U.S. soybeans.
   # Corn futures turned weaker technically after Tuesday’s break to a new contact low.  Looking to the continuous (nearby futures) chart for areas of possible support finds key lows at $3.36 and $3.28 1/2.  Technical buying could be triggered here now that the market has completed a 62 percent Fibonacci retracement of the move up from the fall 2016 bottom.  
   # NOPA could report a record October crush total today.  Estimates for soybean processings average near 164.5 million bushels, or just a hair short of last year’s record for the month.  Soyoil stocks should be a little larger than they were a year ago at something around 1.4 billion pounds.  
   # U.S. trade officials meet in Mexico with their North American counterparts to discuss terms of NAFTA.  Agriculture industry representatives are urging President Trump to avoid a U.S. withdrawal from the trade pact.  Illinois Farm Bureau finds that “2 in every 10 acres on Illinois farms are planted to feed Canada and Mexico.”
   # Rains have developed just slightly later than expected this week, stretching Midwest showers into this morning.  A dry Thursday will be expected to precede storms that pop up again on Friday evening/Saturday morning.  The rest of November’s forecast has a drier bias. 
   # Oil futures give more back as traders take profit on a move that put 37 percent onto WTI futures from their June low to November high.  The dollar index softens further this morning with the euro and yen rallying.  Stock market investors are waiting on the House tax vote and take on some worry about the Senate GOP’s latest attempt to add health care reform onto their tax plan.        

***** Cattle futures look to stabilize after a quick correction; hogs due for technical bounce as stochastics flash oversold. ***** 

   # The Fed Cattle Exchange will feature a small batch of offerings to help give the trade some guidance on cash direction, expectations being that it will fall a little weaker on last week’s $124-$125 deals.  
   # A sharp tumble for hog futures on Tuesday made it a lower close for the December in 10 straight sessions.  Long liquidation by previously-bullish speculators has hastened the retreat, but futures now reach into technically oversold territory.