China trade worries resurface
***** Corn futures down 2 cents; soybeans down 5 1/4 to 6 3/4; Chicago wheat up 1 to 2 1/2. *****

#Grain trading volume plummeted on Tuesday to indicate some caution on the part of market participants ahead of Thursdays crop report. Corn trading volume was a slim 181,000 contracts compared with a recent daily average near 295,000. A large chunk of the soybean volume was contributed by spreading in November and January futures.
#Soybeans were pressured by talk of tensions with China escalating further. Chinas Commerce Minister has suggested that his country is prepared to fight a long trade war and that additional U.S. tariffs will not be an effective way to bring China to the negotiating table. Still possible is that President Trump makes good on a recent threat to tax another $267 billion worth of Chinese imports.
#The weekly export inspections report was a mixed bag featuring strong shipments for corn and weak shipments for soybeans. Wheat inspections were fully anticipated. Cumulative corn inspections stand higher by 62 percent over last years total while soybean inspections are down 35 percent.
#Traders were surprised to see the USDA announce a sale of U.S. spring wheat to Bangladesh. U.S. exporters will ship 120,000 tons of wheat to Bangladesh and will have already surpassed the total amount of 105,000 tons sold to Bangladesh in all of 2017. The South Asian country is not normally a big buyer of U.S. wheat, but quality and price considerations currently make such dealings possible.
#Australian meteorologists issued a fresh El Nino Alert today, calling it a 70 percent chance that El Nino develops before the end of 2018. El Nino may keep Australia dry through the end of the year while it also leaves parts of Brazil drier than normal and does the same for the U.S. Midwest.
#The weather report is currently favorable for growers in South America. Planting is underway in Brazil and Argentina for corn and soybean crops that will be harvested starting in late January. More acres are being planted in South America this year, particularly to soybeans, as farmers attempt to position themselves to benefit from extra Chinese export demand.
#Hedge funds are thought to be largely comfortable carrying their current grain positions into Thursdays report day. Managed money is estimated net-short by about 60,000 contracts of corn and 50,000 contracts of soybeans.
#November soybean futures traded below their 50-day moving average but held on for a settlement above the mark. The contracts 10-day MA is close to crossing above the 50-day in a move that would further confirm a positive recent swing for momentum. Left in place as resistance for SX18 is Mondays high at $8.74 3/4.

***** Live cattle down $0.72 to $1.10; feeders drop $0.92 to $1.10; hogs up $0.30 to down $1.57 on more bull spreading. *****

#Boxed beef prices were firmer on the day and currently run 2-3 percent higher than a year ago. Wholesale prices have been on a trend lower lately and do not support the idea of higher cash prices; however, packers may have whittled down current inventories enough that they need to turn back to the cash market to replenish supplies. Packers are likely to be more hand-to-mouth-type buyers knowing that marketable cattle numbers will be growing more rapidly into the end of the year.
#Hog futures were pressured by follow-through technical selling as well as negative fundamental leanings. Traders have not been enthusiastic about buying above the December contracts 200-day moving average. The outlook for demand is turning less friendly as a stronger dollar limits pork export potential. Despite having problems with supply due to African swine fever, China has not been a substantial buyer of U.S. pork lately, maybe as a partial result of the ongoing U.S./China trade spat.