AgriVisor Afternoon Marketwatch- Chinese interest rate reduction

Friday, October 23, 2015
***** Corn futures mostly closed 1-2 cents higher; soybeans 3-5 lower; Chicago wheat fractionally changed. ***** 

   # Early Friday, the Chinese central bank lowered their key interest rate 1/4 point and reduced the reserve requirements for banks 50 basis points to help stimulate economic activity.  The Dollar promptly surged again, moving up 0.7 index points on the day.  The 2 day gain in the Dollar has been just over 2 index points.  The popular wisdom is the moves by the ECB and PBOC will prevent the Fed from raising interest rates in the U.S. when they meet next week. Brazil’s Real gained against the Dollar after slipping Wednesday on impeachment fears.
   # On the daily system, the USDA reported 208,000 tons of soybeans were sold to China, with another 236,000 switched to China from unknown.  130,000 tons of corn was sold to unknown destination.
   # Weather is the other big variable.  Our S. Plains have had some showers. The hurricane will move across northern Mexico over the weekend, and track across the southern U.S., bringing more next week. Moisture could reach into the southern Corn Belt. Light showers occurred in parts of southern Russia and Ukraine, but likely too late to add to winter wheat plantings.  It remains mostly hot, dry in Australia, although the east could have light weekend showers.  And the center/west area of Brazil is mostly hot, dry, impeding early soybean planting, but some light showers are possible early next week.
   # There’s talk among some of the private analysts that Ukraine’s corn crop may only be just over 21 mmt.  That’s under the USDA’s 25 mmt. estimate and last year’s 28 mmt.
   # FOB prices for U.S. corn are said to be $16/ton higher than S. American origin, but Brazil’s may only have 3-4 mmt. to sell yet. 
   # Harvest progress Monday could be 75% for corn and 90% for soybeans.

***** Live cattle futures ended $0.17-$.47 lower; feeder cattle $.47-$.80 lower, lean hogs $2.85-$1.10 lower. ***** 

   # Cash cattle ended the week lower on a moderate trade at $136-$138.  Wholesale prices ended narrowly mixed.  The USDA COF report was a little negative to distant months because of slightly higher placements.
   # Wholesale pork prices were sharply lower to end the week, with cash hog prices ending lower as well.  China indicated they will start taking pork from U.S. slaughter plants again.