Agrivisor Morning Marketwatch

Friday, December 11, 2015
   ***Good Morning***

***** Grains are mixed to start the day; soybeans 4 higher, corn fractionally higher, and wheat mostly fractionally lower. *****

  #  There’s a lot of intense focus on Argentina with the swearing on of the new President.  The biggest key the industry will be watching the next few days will be talk/plans to remove currency controls on Dec. 14, allowing the Peso to float again.  There’s worry it will fall about 50% to the unofficial rate near 15:1, with some, and the new President, thinking it will only fall half the distance between the official and unofficial rates, about 12.5:1.  It’s said he’s already talking with Wall Street Banks about financing to shore up foreign exchange reserves.  Either would make Argentine grain more competitive in the world markets immediately.
   # Amid that, the trade is talking this morning about yesterday’s good export sales numbers for soybeans and corn, 1.45 mmt. and 1.09 mmt. respectively.  
   # CONAB came out with their latest production estimates for Brazilian soybeans and corn.  They were revised up slightly at 102.5 and 82.0 mmt. respectively, with the small increases coming on small upward revisions of the planted area.
   # Coceral released their latest production estimates.  Soft wheat output was placed at 150.3 mmt., up nearly 2 from last year.  Corn output was placed at 58.5 mmt., down 16.5 from last year. 
   # Argentine planting is 69% done on soybeans and 50% complete for corn according to the Buenos Aires Grain Exchange.  Wheat harvest was placed at 41% complete.
   # There is some talk about the latest EU grain trade data.  Wheat exports have been good, totaling 10.3 mmt. for the year.  But, rising corn imports, 383,000 tons last week, were also noted.  There is some concern as well about the changing attitude in the Euro-Dollar exchange rate and how it may impact trade.
   # The other issue that came to light yesterday was the fund liquidation of short positions in grains.  They were said to have bought 8000 corn, 3000 wheat, and 1000 soybeans, all potentially short covering given the large short positions and the looming end of the year. 
   # The oil market remains a focus in the wake of OPEC deciding not to reign in production.  The International Energy Agency has said they see no recovery in prices until the end of 2016.
   # Rain and snow have boosted soil moisture in the Black Sea area, but was too late to improve conditions.  Recent warmth has melted what little snow cover there was.  Winter kill will be an ongoing concern through the winter months with the generally poor shape of the wheat crop.
   # It will be dry in Argentina into the weekend, with showers returning late weekend and into early next week.  Temps will mostly be either side of normal.  That same forecast covers southern Brazil, with temps possibly a little warmer.  In the center/west and eastern areas of Brazil, there will be scattered showers into Saturday, with dryness then prevailing into early next week.  Scattered showers return again midweek, but amounts don’t look any better than light/moderate.  The general dryness in the north remains a concern. 
   # The Dollar held steady against major currencies ahead of next week’s expected rate increase from the Fed.  New economic data was slightly better than expected.  Retail sales were slightly higher, with producer prices rising slightly in November. 

***** Cattle are starting slightly lower; lean hogs slightly higher. *****  

   # Wholesale beef is slightly lower.  Pork prices were higher.  
   # Cattle have traded lower in the cash market this week, with prices as low as $116.  Trading is thought to be done for the week, with feedlots waiting to see if the market strengthens next week.  Cash hog prices have been a little softer, but base prices stay in the very low $50s.