AgriVisor Afternoon Marketwatch

Thursday, December 03, 2015
***** Corn futures ended 6-7 higher, soybeans 5 higher, with Chicago wheat 10-12 higher. ***** 

   # The news of the day centered around the foreign exchange market and the new European Central Bank monetary policy.  The ECB only cut their “deposit” interest rate 10 basis points to 0.3%.  They also indicated they will extend their asset buying program(their version of quantitative easing) through March 2017, but they did not indicate they would expand the pace of buying.  The changes were not as significant as analysts had expected to see, setting off a wave of activity in the forex market.  The move in the Euro-Dollar exchange rate was the largest in either direction since 2009.  The Euro basically recouped all of its decline over the last month.  The Dollar Index ended the day over 2 points lower.  The surge in the Dollar had ramifications across a number of asset classes, with the Dow dropping 252 points, treasury bond futures dropping 4 points, and the Continuous Commodity Index jumping 4.5 points on the day. 
   # Grain export sales were mediocre, but not negative.  The USDA reported soybean sales of 878,300 tons, 77,500 tons of soymeal, 499,400 tons of corn, and 432,900 tons of wheat, a small portion of which was new crop.  The USDA reported 132,000 tons of soybeans were sold to China on their daily system.  
   # Scattered showers are slated for the center/west area of Brazil into early next week, with better coverage possibly coming at the end of the period.  Temps will be close to normal, if not slightly below.  Southern states will see rain/thunderstorms, with early week turning drier again.  Temps will be cool, but turn warmer early next week.  Argentine weather will be much the same. 
   # The Buenos Aires Grain Exchange reported new crop plantings are 54% complete for soybeans and 44% complete for corn.  Wheat harvest is thought to be 31% complete.  Some of the very early plantings are already pollinating.  They didn’t change their acreage expectation.
   # Informa raised their forecast for the Arg. corn crop 2.5 mmt. to 21 mmt. and lowered the soybean estimate 0.5 to 58.5 mmt.  They raised their Brazilian soybean forecast and lowered the corn forecast ever so slightly, but not enough to have an impact.  
   # Wheat continues to get redelivered against Chi Dec futures, but the strong stopper is slowly absorbing the supply.  The level of redeliveries is slowing, and becoming a non-important feature. n quality may be better than originally perceived.  Deliveries against KC Dec wheat are starting to wind down too.
  #  Weather is thought to be good in the Great Plains for our new wheat crop as well as in the Black Sea region.  But weather is fading for now as a mover unless until there’s a possibility of winter kill.

***** Live cattle ended $2.17-$1.00 lower, feeders $0.97-$1.00 lower, and lean hogs $1.00-$0.72 lower. ***** 

   # Sluggish wholesale beef prices and soft hide/offal values are weighing on cash cattle prices, keeping futures on the defensive because of their premium level.
   # Hog futures weakened with cattle, but the firmer tone in the wholesale sector is limiting slippage in the cash market.  The slight futures premium may be the biggest negative.