AgriVisor Afternoon Marketwatch

Friday, October 09, 2015
***** Corn ended 8 lower, soybeans 4-5 higher, and Chi. wheat 2-3 lower. ***** 

   # The acreage reductions were the big surprise in the USDA reports.  NASS cut corn plantings nearly 600,000 and harvest acres by 500,000.  But they cut the soybean planted and harvested acres by over 1.1 mln.  Last week’s wheat acreage cuts were an indication these cuts could be big.   
   # The yield changes were not what the trade expected to see.  Corn yield was raised 1/2 bu. to 168.0; the trade was looking for a small reduction.  The soybean yield was raised 0.1. to 47.2.  The trade was looking for that, but given the persistence of reports from the country, we suspect many were expecting more. The combination dropped corn output 30 mln. bu. to 13.55 bln. and soybeans 47 mln. to 3.888 bln.  
   # The s/d numbers for all the grains were seen a little negative, with the corn stocks only cut 31 mln. bu., the soybeans 25 mln., and wheat 14 mln. bu.  Export reductions were a part of the latter two, with the trade still thinking the corn export number is too high.  
   # CONAB(Brazil’s USDA counterpart) released their first estimates for their new crop.  As expected, they projected a 100.1-101.9 mmt. soybean crop, and an 82.6-83.6 mmt. corn crop.  Curiously, they left their wheat forecast at 6.652 mmt. even after some recent weather problems.
   # Other news mostly good pushed to the background.  But China did buy 360,000 tons of U.S. soybeans and Egypt bought 180,000 tons of Russian wheat.   
   # Saudi Arabia and Syria have outstanding tenders for wheat. 
   # Weather is expected to generally remain dry in the Black Sea area, but light showers are possible over the weekend.  Cooler conditions persist, slowing germination and emergence.  Australian forecasts include light weekend showers, but hot dry conditions will follow.  The slow start to the rainy season in northern Brazil is being closely watched.  And it’s staying dry in southern Africa.
   # U.S. weather is expected to remain warm, with wetness in the heart of the Corn Belt early, with the pattern shifting north and west.  The S. Plains could remain dry. 
   # The Dollar continued to decline on expectations the Fed will not begin to raise rates this month, and maybe not next.  That same attitude lifted stock prices around the world.  The Brazilian real has been consistently strong the last couple of weeks, a change that has gone largely unnoticed in the grain pits.

***** Cattle futures closed $0.27-$0.67 higher, feeders $1.32-$1.75 higher, and lean hogs $0.32 higher-$0.10 lower. ***** 

   # Wholesale beef prices were mixed, but the volume of trade continues to be reasonably robust, suggesting demand might be returning to the complex.  There was a good cash trade in cattle with bids as high as $127, up $6-$7 from last week. 
   # Cash hog prices held firm, and packer margins remain good. Wholesale pork prices were mixed, but this week’s volume of trade has not been exceptionally great.