Agrivisor Morning Marketwatch

Monday, November 30, 2015
   ***Good Morning***

***** Grains are narrowly mixed to start the day; soybeans 1-2 higher, corn fractionally changed, and wheat mostly 1 lower-4 higher, with the December contract off 4. *****

   # The bigger story today came late Friday from Argentina.  The incoming govt. plans to lower the export taxes 5% for soybeans, wheat, and corn.  They also plan to eliminate the wheat and corn export quotas.  Remaining export taxes will be phased out over time.  They are expected to put in place a plan to eventually eliminate the differential between the official Peso exchange rate and the market rate. The Peso is rising in the traded market, with today’s rate near 14.96. 
   # The changes in Arg. export taxes/quotas aren’t expected to have much impact on planting, with 39% of the corn and 43% of the soybeans planted.  Traders at the Buenos Aires exchange see corn area rising a little, but still down 20% on the year.  Brazilian soybean planting is said to be 81% complete.  Producers have already sold 41% of the new crop, compared to 26% at this time last year. 
   # A noted analyst is indicating the Brazilian govt. cut funds 43% for crop insurance in 2015, and they are expected to only be slightly higher in 2016.
   # Monday is also the last day of the month, which could lead to some end of the month “tidying up” by the hedge funds, which could translate into firmer markets, especially after Friday’s weakness.
   # The uncompetitive position of U.S. wheat in the world trade was highlighted by reports that a cargo of French wheat has been sold to Mexico.
   # Deliveries may continue to be a part of the weakness in wheat.  2343 contracts were tendered to be delivered against Chi. Futures tomorrow.  Only 198 wheat contracts were tendered in K.C.  There was only 910 soyoil contracts tendered and no corn or soymeal.
   # Reports out of Malaysia indicate Nov. exports of palm oil were off 10%, smaller than the trade expected to see.  Palm futures were down 0.6% on the news, but they had risen over 3% the last 3 days.  The trade is also talking about forecasts for smaller palm oil output in the months/year ahead.
   # Rain and snow have boosted soil moisture in the Black Sea area, but came too late to improve condition much.  Winter kill will be an ongoing concern through the winter months with the generally poor shape of the wheat crop.
   # Showery conditions prevailed across Argentina over the weekend, but this week’s weather looks drier.  Temps will be warm to normal.  A showery pattern is expected to prevail across southern Brazil.  Temps will be normal/warm early, but turn cooler.  In the center/west and eastern areas of Brazil, there were scattered showers over the weekend. It will be a little drier and warm into midweek, but scattered showers and cooler temps will return later.  Overall, the pattern remains a little dry. 
   # The Dollar is at an 8 month high to start the day, with the forex market looking for the Fed to finally raise rates.  The Euro is softening with talk the ECB will ease policy slightly more.  The ECB policy seems to be the one the trade is most anxious with gauging the commentary.  Factoring in today’s online sales, Thanksgiving retail sales are expected to be in line with expectations.  There weren’t any significant shocks in world financial releases.
***** Cattle should start steady/firm; lean hogs steady/firm. *****  

   # Wholesale beef is slightly higher.  Pork prices were firmer.  
   # Cash hogs should be steady, with packers buying for the resumption of a full slaughter schedule.  Hog supplies are readily available, but base prices should remain at $50/low $50s.  Cattle are expected to be steady, and maybe higher.  Packers are thought to be extremely short bought.  Asking prices are expected to start the week at $132 live and $200+ dressed.