***** Grains are mixed to lower start the day; soybeans fractionally changed, corn down 2-3, and wheat off 3-4. *****
# As much as anything, the industry is still trying to sort out the implications of Macri’s victory in Argentina. Some are even suggesting his election could change the planting mix, but with 37% of the corn already planted, his policies still somewhat uncertain, and the fact he doesn’t take office until Dec. 10, we don’t think planting will be impacted.
# In another aspect, some worry the 15-20 mmt of excess soybean stocks Arg. farmers have been hoarding could quickly find their way to market. Some even talk of a temporary suspension of soybean export taxes, but that’s unlikely with the govt. so dependent on those taxes as a revenue stream. But in the campaign he did mention a possible 5% immediate reduction. The other variable could be a change in the official exchange rate, one that’s well over the “black market rate.”
# The other big story of the day is; a Russian jet was shot down by Turkey after it crossed into Turkish airspace. The fear is this could trigger a wider spread of the conflict in the Middle East.
# The 1 point jump in the winter wheat rating to 53% good/excellent was expected. It’s still lower than it was last year. 96% of the plantings are done. There will only be 1 more weekly rating before they cease for the winter. But, selected states have monthly reports during the winter.
# Weather remains a key variable. Moisture for the Great Plains will boost prospects for our winter wheat crop. Moisture remains in the forecast for the Black Sea region. Temps will be cool, but not exceptionally so. Drier weather is a boon for wheat harvest in Australia.
# Showery conditions continue across parts of Argentina, limiting planting progress in some locations. Showers continue to be interspersed with dry days across much of southern Brazil. Temps are warm this week, but will cool over the weekend. In the center/west and eastern areas of Brazil, showers have been more scattered, inconsistent. Temps are mostly above-normal to normal.
# Palm oil prices are weak in Malaysia. The trade is expecting a report tomorrow to show a modest slowdown in exports.
# The Dollar was a little softer today, but still close to 8 month highs on expectations the Fed will raise interest rates in December. A German business climate index rose to a 17 month high in November, but their rates on 2 year notes fell to multi year lows today.
***** Cattle should start steady/firm; lean hogs slightly lower. *****
# Wholesale beef is narrowly mixed on reasonable volume. Traders are starting to see retailers buying needs for after Thanksgiving. Pork prices were mixed to lower, but the volume of trade remains reasonable strong.
# Cash hogs should be steady/weak, with packers not yet buying for the resumption of a full slaughter schedule. Hog supplies are readily available, but base prices should remain at $50/low $50s. Cattle traded steady/weak Monday, but should improve some after the holiday with stronger beef demand. Live is near $127, with dressed at $195.
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