Grains slip in lightly traded affair
***** Corn down 2 to 2 1/2 cents; soybeans lower by 6 to 7; Chicago wheat off 5 to 6 3/4. *****

#Grains quietly lower on position squaring ahead of the crop report. First glance will go to a first pair of survey-based estimates for U.S. row crop yields. Government numbers will be viewed against average analyst estimates of 176.2 bushels per acre for corn, 49.6 bpa for soybeans. Much attention will also be paid to USDA projections for global grain production outside of the U.S. amid expectations of major cuts coming to wheat production.
#USDA announced a daily export sale for 135,000 tons of soymeal headed to the Philippines for 2018/19 delivery. The government analysts currently project that U.S. soymeal exports will fall by three percent next year after this year reaching a record 13.5 million tons.
#Crop estimates from Brazil were slightly supportive in the early trading hours as they came in under where the USDA had pegged them on the July report. With significant cuts expected for world grain production forecasts, tightening balance sheets outside of the U.S. may prove the theme of Fridays crop report.
#Weather for the remainder of the week is biased drier in the West, wetter in the East. Isolated showers may pop up again where they came through on Tuesday evening across northern Illinois. The forecast looks little troublesome for growers in the Northwest Corn Belt as it runs warmer and drier throughout the two-week outlook period.
#Wheat futures suffered from a pre-report profit-taking campaign that had the hedge funds lightening up on a newly built net-long position held on the grain. The fundamental influences remain friendly as we approach a crop report that should feature large cuts to supplies in the hands of the major exporters. Traders are also still keeping an eye out for potential export restrictions out of Russia as falling ruble currency increases export strain on supplies of an already short crop.
#This week has reportedly featured much progress in the negotiations over NAFTA trade framework. A deal is said be close on the contentious topic of automobile trade. Existing tariffs against U.S. agricultural products would presumably come down and/or go away once an agreement is reached, including those currently in place against U.S. pork.
#News out of the White House is a touch quieter this week as President Trump takes summer vacation at his New Jersey resort. The presidents latest tweets have mostly involved mentions of support for various congressional candidates and commentary on the Department of Justice Russia investigation; nothing new on the trade front.

***** Live cattle drop $1.55 to $1.95; feeders off $0.72 to $1.07; hogs higher by the $3 limit. *****

#Hogs rallied on a move that was aided by technical short-covering and trade optimism. A quick closing of the down gap opened on Wednesday suggested that there was some exhaustion on the part of sellers. News of progress made on NAFTA talks encouraged fundamental buying.
#Unwinding cattle/hog spreads pressured futures for the former meat on Thursday. Also negative were lower wholesale prices that stirred some pessimism over the potential for this weeks cash trade. October futures gave up recently-earned support from the contracts 200-day moving average but held up ahead of the 50-day.