AgriVisor Morning MarketWatch

Wednesday, October 31, 2018
***** Corn futures down a penny at the break; soybeans fractionally changed; Chicago wheat lower by a nickel. *****

   # Grains are mixed under light overnight trading volume. Generally favorable world weather leans on prices along with persisting trade worries. Outside markets are rebounding in a manner than lends the grains some support.
   # December corn stands higher by 7 1/4 cents for the month of October. Soybeans are off 11 1/2 and Chicago wheat down 10 1/4.
   # Parts of central Illinois received up to 1.5 inches of rain on Tuesday.  Rains could be heavy as they swing through the Eastern Corn Belt today and tomorrow. Wetter than normal remains the trend for the 6-10 day outlook period.
   # U.S. government meteorologists issued a report this week that still calls it a 70-75 chance that an El Nino develops by the end of the year and sticks around until at least spring. El Nino is sometimes associated with dry weather in Brazil’s north-central growing regions like Mato Grosso while it can dump heavy rain on the country’s southern states.  
   # Weather in Brazil is supportive for production at the start of new Southern Hemisphere row crop season. A record pace for soybean plantings leaves the potential for a stronger second crop of corn, if it can go into the ground early. The safrinha corn crop will be put in starting in February after the first of Brazil’s soybean crop is harvested. 
   # Fund traders are thought to be holding a small net-long position in the corn market, something near 10,000 contracts. The managed money soybean position is net-short by about 75,000 contracts again after bets were almost evenly split just two weeks ago. Funds have a wager on Chicago wheat that is estimated net-short by 40,000 contracts.
   # U.S. prosecutors have filed charges against Chinese intelligence officers for corporate espionage. The indictment accuses 10 Chinese citizens of conspiring to hack into the computers of a U.S. aircraft manufacturer to steal design secrets. The development comes as U.S. officials fight China in a trade war that is in big part a product of China’s alleged intellectual property theft.
   # China is showing signs of economic weakness, such as from a report finding manufacturing production growth slowing to a two-year low. The government has recently devalued their yuan currency to relieve the market of pressure.
   # Wheat news remains mostly bearish as better weather in the U.S. Plains allows farmers there to wrap up winter wheat plantings. Conditions are also notably improved for most other major Northern Hemisphere growers as well.    

***** Cattle futures look to open steady/firmer, hogs steady/weaker to reverse slightly from early-week trends. *****

   # Cattle futures are breaking down as traders find it difficult to justify the board’s premium over cash prices. Futures may find support again if wholesale beef prices continue to trade firm. December live cattle approach a test of technical support from the month’s low at $116.02.     
   # Pork prices are climbing in a way that belies earlier worries about flagging demand. Pork exports could still stand to pick up after slumping in the past few months, but strong domestic consumption is helping to relieve to market of excess supplies.