Agrivisor Morning Marketwatch

Monday, October 05, 2015

      ***Good Morning***

***** Grains are higher to start the day; soybeans up 4-5, corn steady-up 1, and wheat up 2-3. *****

   #In the short term, wheat is persisting as the upside leader, with weather worries lifting prices to start the week.  Dryness in the Black Sea producing areas remains, with forecasts showing little promise of rain.  And, it now looks like temps will be cool, further inhibiting development.  
   #Wheat weather concerns persist in other areas too.  Dryness remains an issue in parts of Australia; wheat is filling heads.  Argentina had a weekend frost event that reached Cordoba.  Heavy rains are impeding harvest in southern Brazil, with quality loss the primary issue.  And even parts of our S. Plains are dry, slowing wheat planting, but there is rain in the forecast for this week.  There’s talk about the flooding in the Southeast from the hurricane, but it’s of more interest in cotton than for the row crops.
   #Droughty weather(tied to El Nino) is cutting into potential palm oil output in Malaysia, giving palm prices a lift.  Drought also cut India’s soybean output, potentially raising their vegoil imports by as much as 6%.
   #Egypt bought 235,000 tons of wheat over the weekend, its biggest buy so far this year.  They paid 6% more than the previous 2 tenders 2 weeks ago. 
   #China remains on their week long “Golden Week” holiday through Tuesday.  
   #The trade is less upbeat regarding Friday’s USDA report for corn/soybeans in the wake of reports from the country and the Informa/FC Stone projections on Friday.  Informa is looking for 168.4 and 47.2 bu. yields, with FC Stone looking for 167.0 and 46.9. Informa lowered their acreage significantly; Stone didn’t change theirs.
   #Given the low prices, and higher cost of production, there’s talk S. American producers will shift some land from corn to soybeans.  Planting has started in southern Brazil, but early planting is slow to get off the mark in the important northern areas as rainfall has been spotty so far.  There could be some light, scattered showers to start the week, but the forecast looks mostly dry. 
   # Harvest numbers will play a part later today.  Last week’s harvest numbers were 21% soybeans and 18% corn.  This week’s weather looks generally good for making good progress, with middle/late week the best chances for rain in the Midwest.
   #Brazilian farmers are said to have already priced 37% of their new soybean crop compared to 13% a year ago.
   #Friday’s smaller than expected job growth is leading analysts to think it has diminished the potential for the Fed to raise interest rates in October.  That led to some softening of the Dollar overnight and higher equity markets around the world.

***** Cattle should start slightly higher; lean hogs steady/firm. *****
   #Wholesale beef is still declining, with wholesale pork slightly lower.  But cattle futures offered small indications Friday the decline may be exhausting itself.  Meanwhile, the pork complex will face more competition from the collapse in beef prices, along with fighting the tide of seasonally increasing supplies. 
   #Cash hogs should be steady/firm.  Cattle could trade higher this week.