Agrivisor Afternoon Marketwatch

Wednesday, December 02, 2015

***** Corn futures ended mostly 3 lower, soybeans 3-4 higher, with Chicago wheat 4-5 lower. ***** 

   # Movement of the Dollar probably had the biggest influence in the trade, driving prices lower midday, only to stabilize as it fell from its midday peak.
   # Demand remains mildly supportive to soybeans, with another 124,000 tons reported sold on the USDA daily system.  Export sales come in the morning.  The trade is looking for soybean sales to total 800,000 to 1.2 mln. mln. tons.  Soymeal sales are expected to hit 150-300,000 tons, corn at 500,000 to 1.1 mln. tons, and wheat 250-500,000 tons.  
   # The inconsistent start to Brazil’s rainy season across Mato Grosso and states to the east is getting some attention.  The situation isn’t dire, but unless widespread rains start to come soon, the anxiousness about this year’s Brazilian crop may start to build.  So far, moisture has mostly come in the form of scattered showers.  November moisture was slightly less than normal in the center/west; with above normal across southern states, and normal/above in Argentina. 
   # The weekly ethanol output showed a steep dip in output, back to 956,000 bpd.  The combination of the last 2 weeks makes one wonder if there wasn’t a reporting problem.  Stocks grew slightly, and there were some small imports. 
   # There’s constant talk out of Argentina about some producers scrambling to switch acreage to corn in the wake of proposed changes outlined by the newly elected President.  But we wonder about the extent of the truth with so much of the crop already in the ground.  New planting estimates will come later tomorrow, offering better insight. 
   # There’s still talk about potential improvement in the corn export sector, with our FOB value under Brazil’s and Argentina’s.  Interior basis levels in the U.S. strengthened today, hinting merchants may be gearing up to fill the pipeline to meet those needs. 
   # Wheat continues to get redelivered against Chi Dec futures, but again a strong stopper was noted.  The trade is taking the size of deliveries and the number of registered certificates as an indication quality may be better than originally perceived.  Deliveries against KC Dec wheat continues too, but there hasn’t been a good stopper yet.
   # Weather is thought to be good for our newly planted crop as well as the crops in the Black Sea region.  But weather will fade for now as a mover unless there’s a threat of winter kill.
   # The Dollar surged on midday comments from Fed Chairman Yellen, with the Index briefly moving to a new high of the year.  But after hitting a new peak, they broke sharply, ending only slightly higher on the day.  The trade took her comments as a confirmation they will increase rates at their December meeting. Traders will also watch the conclusion of the European Central Bank meeting tomorrow.

***** Live cattle ended $3.00 lower, feeders $3.67-$3.95 lower, and lean hogs $0.60-$0.65 lower. ***** 

   # Cattle futures got hit again Wednesday with reports cash prices had traded lower on the week, and they were already at a discount to futures.  Wholesale prices were mixed, but the volume was tepid.
   # Hog futures followed cattle, but the slightly stronger cash market limited the decline.  Wholesale pork volume was good, but prices slightly lower, which may translate into softer hog markets Thursday.