AgriVisor Afternoon Marketwatch

Wednesday, October 07, 2015

***** Corn ended 2 lower, soybeans 3-4 higher, and Chi. wheat 9-10 lower. ***** 

   # News was limited Wednesday, with the markets lacking leadership the financial/forex/energy markets provided yesterday. 
   # The weekly ethanol report showed a pace of 960,000 gals./day, equating to a grind just over 99 mln. bu. for the week.  That’s up slightly from last week.  Seasonally, the grind is slow at the start of the year, picking up as harvest accelerates.  We need a pace near 101 mln. bu./week to reach the USDA target.  Crude oil stocks rose 3.1 mln. barrels, more than expected, helping weigh on corn and soyoil.
   # Export sales come tomorrow.  The trade is looking for: 175-375,000 tons of wheat, 550-750,000 tons of corn, 750,000-1.2 mmt. of soybeans, and 100-300,000 tons of soymeal.
   # Traders look for soybean buy orders from China to begin again with their Golden Week holiday ending today.  But with the report coming, they may choose to wait until next week.  Their preliminary Sept. import number should come in the next few days, with the weekend possibly more likely.
   # Weather is expected to generally remain dry in the Black Sea area, but light showers are possible late this week.  One weather model is hinting the longer term pattern may turn a little wetter, but the others are still pointing to dry conditions.  All are expecting cooler conditions, slowing germination and emergence.  Australian forecasts include some showers in the southeast, but the west is expected to remain dry in the near term. New long range forecasts are generally dry for most producing areas.  And it’s staying dry in southern Africa.
   # U.S. weather is expected to remain warm, dry in the Midwest.  That’s good for harvest, but not good to get the new wheat crop well established, especially in some of the drier areas of the southern Corn Belt.
   # Traders are watching Brazilian weather closer.  Planting is going well in Parana, one of the old southern states.  But moisture is slow to develop in the northern areas where all the expansion has taken place in recent years, with only 1.6% of the planting done in Mato Grosso.  It is early, but there is some evidence of drier weather during an El Nino to the north and east.  
   # Along with the USDA issuing our crop report Friday, CONAB(the Brazilian counterpart) will release their latest crop numbers, including their first forecast for their new crop.   Expanded plantings are expected, with production estimates expected in the 97-102mmt. range.
   # The slippage in the crude oil market weighed on the equity markets.  Healthcare companies led the strength, but there wasn’t a lot of news.  The Dollar regained some strength, but again with limited news.  There is talk China is heading toward allowing the marketplace to set the value of the Yuan.
***** Cattle futures were sharply higher, closing $2.37-$1.30 higher, feeders $2.55-$2.92 higher, and lean hogs $0.80-$0.20 lower. ***** 

   # Wholesale beef prices were near steady again, but the volume of trade was reasonably strong, suggesting demand might be returning to the complex.  There was a small trade in cattle at $120, up $4-$6 from last week. 
   # Cash hog prices were slightly stronger, but packer margins are dissipating. Wholesale pork prices have stalled, and the volume of trade seems less robust.