What Traders are Talking About:
Overnight highlights: As of 6:00 a.m. CT, corn future are narrowly mixed, soybeans are 3 to 6 cents higher and wheat futures are mostly 2 to 4 cents higher. A choppy to mildly firmer start is expected when the day session begins at 8:30 a.m. CT, but the upside is limited to mild short-covering and traders may sell even a modest bounce. Cattle and hog futures are expected to be mixed this morning.
* Private crop estimates begin. INTL FC Stone is out of the gates with its first corn and soybean estimates of the year. The brokerage firm estimates the corn crop at 13.993 billion bu. and the national average yield at 157 bu. per acre. The firm estimates the bean crop at 3.309 billion bu. on a national average yield of 43 bu. per acre. In July, USDA projected (non survey-based) the corn crop at 13.950 billion bu. and 156.5 bu. per acre and the soybean crop at 3.42 billion bu. and 44.5 bu. per acre. USDA's first survey-based estimates for corn and beans will be released Aug. 12. USDA is currently conducting surveys for its August report.
The long and short of it: Traders will start focusing more on pre-report positioning as private crop estimates hit the market. But given the current weather pattern, it will be hard to encourage more than modest short-covering ahead of Aug. 12 -- and futures may continue to fall into the August Crop Production Report.
* More of the same on the weather front. There are several pockets of rain in the western Corn Belt this morning. Based on radar, parts of southeastern Nebraska got the best rains overnight, with that activity moving into eastern Kansas and northwestern Missouri early this morning. The initial wave of activity is skirting much of Iowa. While there are additional rainfall chances through the day, amounts and coverage levels are generally expected to be light. Still, traders view the forecast as favorable through mid-August with calls for below-normal temps and normal to above-normal rainfall.
The long and short of it: Traders continue to view the forecast as non-threatening, which will keep pressure on new-crop corn and soybean futures and limit the upside to short spurts of corrective buying.
* Key jobs report out this morning. The average guess ahead of the Labor Department's jobs report is for an increase of 183,000 non-farm payrolls in July, though the "whisper" number is in excess of 200,000 jobs added last month. Economists' expectations are building for the official jobs data after private-sector jobs growth exceeded expectations earlier this week. The unemployment rate is expected to tick down to 7.5% from 7.6% in last month's report. The key to any movement in the unemployment rate will likely be the participation rate. Also key today will be revisions to past data.
The long and short of it: The labor market is one of the main areas the Fed is watching as it decides when to start tapering its quantitative easing, putting increased focus on this morning's jobs data.
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