AgriVisor Morning MarketWatch

Thursday, October 11, 2018
***** Corn futures down 1 1/2 to 2 cents at the break; soybeans off 3 1/4 to 3 3/4 cents; Chicago wheat fractionally firmer. ***** 

   # USDA is set to release the September Crop Production and World Agricultural Supply and Demand Estimates reports today at 11:00 am central.  First glance goes to yields, where the average trade guess sees corn yield rising from 181.3 bushels per acre to 181.8 bpa and soybean yield rising from 52.8 bpa to 53.3 bpa.  Bigger U.S. supplies should more than offset reductions to production estimates abroad.  Global corn ending stocks are seen rising to 159 million tons and soybean stocks to 110 mt.
   # Markets are steel reeling from Wednesday’s sharp U.S. equity sell-off.  Investors are spooked by rising interest rates and trade tensions.  Asian and European markets were lower on Thursday and the U.S. stock futures point to a lower open here.  
   # Hedge funds are have their bearish grain bets emboldened by outside market worries.  They are estimated net-short corn by about 70,000 contracts while being net-short soybeans by approximately 60,000 contracts.  
   # The Western Corn Belt waits to dry out so that harvest can resume.  Many areas of the region have received 10 inches of rain in the past 10 days. Some of the northern Plains waits to thaw out after up to a foot of snow fell in areas near the Canadian border.  Rain is in the forecast for the Midwest on Friday but mostly dry is otherwise the outlook for the next 6-10 days.  A cold spell is expected for at least the next two weeks.
   # Hurricane Michael was the third most powerful storm to hit the U.S. mainland, according to Reuters.  Billions of dollars of property damage have already occurred and almost a half of a million people are out of power.  Flooding is now a threat for Georgia and the Carolinas.     
   # Brazil’s Conab crop agency estimated the country’s new corn crop potential at 89.7-91.1 million tons, soybeans at 117-119.4 mt.  USDA is more aggressive on its outlook, calling 2018/19 Brazil corn 94.5 mt and soybeans 120.5 mt.  
   # The Rosario Grains Exchange pegs Argentina’s 2018/19 corn crop at 43 mt versus USDA at 41mt.  The Argie soybean crop is predicted by the Rosario analysts at 50 mt versus USDA at 57 mt.   
   # Oil futures are following the stock market lower.  Concern over the health of the economy casts pallor over oil demand potential. The market will have an injection of fundamental guidance today from a weekly energy inventory report.   

***** Livestock futures look to open steady/weaker as the space faces general risk-off pressure like most other markets. *****

   # Cattle futures have slumped lower on profit-taking, the bulls running out of fresh, friendly, fundamental inputs.  Outside market weakness is spilling in and cattle are also vulnerable to technical selling after December futures broke lower from a month-long uptrend.            
   # Hog futures had early gains erased by selling linked to outside market stumbles. Lower stock prices sometimes stir up worry about consumer demand. The pork cutout is flat for the week but still up 10 percent on the year.  Export demand has been strong year-to-date but has slowed recently due to diminished buying interest from China and Taiwan.