AgriVisor Morning MarketWatch

Tuesday, November 06, 2018
***** Corn fractionally weaker at the break; soybeans down 1 to 2 cents; Chicago wheat fractionally firmer. ***** 

   # Election Day. Pollsters won’t have a clear view on the outcome of most races until after the grain market is closed, but Wednesday’s session will likely show the impact of the election with strong influence coming into the grains from stocks, bonds, and the dollar.
   # Most traders look for corn and soybean yields to be revised lower when the next crop report is released on Thursday. Soybean yield has never been reduced in November after rising in September and October, but traders see this year as an exception due to harvest weather troubles. The average trade guesses from analysts surveyed by Reuters have corn yield going from 180.7 to 180 bushels per acre, soybeans from 53.1 to 52.9 bpa.  
   # A lower U.S. corn yield would help corn carryout tighten up some. The consensus estimate calls for U.S. ending stocks down to 1.773 billion bushels. The trade sees soybean stocks as having an upward bias due to a poor outlook for exports. The average trade guess for soybean ending stocks is 898 million bushels, up from 885 mbu in October.
   # China’s Vice President said today that his country’s leadership is ready to engage with the U.S. on talks about a new trade deal. The two countries will have something of a preview meeting on Friday, when U.S. Secretary of State Mike Pompeo and Defense Secretary James Mattis will meet with their Chinese counterparts to discuss international defense and security issues. 
   # Monday’s Crop Progress report showed corn harvest a little behind the expected pace, but still on par with average, at 76 percent. Soybean harvest was pegged at 83 percent versus the five-year average at 89 percent. Farmers have caught up after wet weather had them 16 points behind the average just two weeks ago.
   # Winter wheat plantings were called 84 percent complete through Sunday, leaving growers six points behind the average pace. Ideas about extra acres are being tested now that it is getting late in the year and cold. Newly-planted wheat crops will be vulnerable to freeze damage in a big way starting this weekend.  
   # The government’s 6-10 day weather outlook map is shaded a dark blue across the Midwest to indicate near-certain probability of next week being colder than average. A wetter trend looks to continue for the Eastern Corn Belt over the period, but the Western Belt should have an open window for finishing harvest.
   # Temperatures averaged 48.3 degrees across Illinois last week, falling 1.6 degrees below normal. Precipitation was 0.64 inches above normal at 1.53 inches for the week. The heavier rain totals were recorded in the southeast corner of the state.  

***** Livestock futures look to open with follow-through pressure after losing various points of chart support on Monday. *****  

   # Monday’s break leaves cattle futures vulnerable to follow-through selling, but the December contract’s position below its lower Bollinger Band should help some to limit pressure. The fundamental picture is leaning more negative as packers look well-stocked and demand approaches a seasonal lull.  
   # Hogs face pressure from bearish action in outside markets, but should enjoy support as long as wholesale pork prices can hold early-week gains. There also remains optimism over pork export potential in the wake of animal losses in China due to African swine fever.