Agrivisor Afternoon Marketwatch: exports & Dollar weakness lifted prices

Thursday, November 19, 2015
***** Grains ended the day higher, with wheat leading the way up; Chi. wheat ended 6-7 higher, corn 2-2 1/2 higher, and soybeans 2 1/4-2 1/2 higher. ***** 

   # The Weekly export sales triggered the early strength in grains, along with the weaker Dollar. All were at, above the top of their expectation ranges.  Soybean sales - 1.797 mmt., corn - 779,800 tons,  wheat – 721,900 tons. 
   # The Baltic freight index fell to a new low.  The cheap ocean freight is said to be helping spark world buyers to book their needs more aggressively.  Brazil/Argentine FOB corn prices are said to be higher than the Gulf.
   # South American weather remains generally good, except for the center/west and eastern areas of Brazil.  Conditions are variable there, continuing to lack indications the rainy season has started.  Some troubles with soy planting/replanting in Mato Grosso could result in switches toward first-crop corn acreage.  
   # The trade is also looking ahead to Sunday’s Argentine elections, with both candidates promising some relief on the soybean export taxes.  Some are looking for a flood of producer selling, but it’s more likely to be a modest/moderate increase.
   # Improved soil moisture levels in the Southern Plains have taken some weather risk premium away from the U.S. wheat market.  Warmer conditions in Russia and Ukraine could improve growth on before dormancy, reducing anxiety somewhat.  Ukraine capped wheat exports out of this year’s crop at 16.6 mmt., and said the condition of the new crop would not affect them at a later date.   
   # A snow system is moving across northern parts of the Corn Belt at week’s end/the weekend, heavier in the west than the east.  Some precip will come to Central/Southern Plains next week.  Temps are expected to be generally mild.  
   # The new winter forecast still calls for generally warm, dry conditions across the northern areas of the U.S.  The southern states and the Central Plains are expected to be a little wetter than normal.  
   # The Dollar had its largest 1 day break against the euro and yen in a month.  This came amid increased belief the Fed will raise rates at its December meeting.  Some are talking of another push up with that, but today’s break suggests we may be in for a buy-the-rumor, sell-the-fact pattern.  The Brazilian Real continues to grind higher, and is close to getting at its highest level since mid-August.
***** Livestock remain volatile, with live cattle closing $1.07-$0.80 lower, feeders $1.50-$1.97 lower, and lean hogs $1.02 higher-$0.45 lower.  ***** 

   # Cattle futures continue their volatile trade, with bulls looking for demand and prices to firm in December, and bears talking up the persistent decline in the wholesale price.  Choice beef is $204.83, select $193.34, both at their lowest in nearly 2 years.
   # Lean hog futures are feeling the volatility in the cattle/beef complex.  But relatively firm cash hog and wholesale pork prices are helping stabilize the complex.  #2 pork ended the day at $74.39. 
   # Estimates for tomorrow’s COF report: On feed – 102.2, placements – 96.0, and marketings – 96.0.