AgriVisor Afternoon Marketwatch

Saturday, May 07, 2016
***** Grains ended the day on a positive note, with soybeans leading the strength; they closed 20-22 cents higher, corn 3-4 higher, and wheat mostly fractionally higher. ***** 

   # The uncertainty about S. American crops lifted corn and soybeans, especially the latter, at the close of trade Friday.  The trade is a little anxious about what the USDA and CONAB might forecast this week, The USDA and CONAB both come out Tuesday.  
   # The trade isn’t so anxious about what CONAB might suggest for soybeans, although the general perception is that the crop is smaller than 100 mmt.  It’s the 2nd crop corn they will look most closely at, with many privates lowering expectations 5-7 mmt.  AgRural lowered their number to 48 mmt. from 54.6 mmt.  
   # With soybeans, the trade is most interested in seeing how much USDA revises the Argentine number given the flooding problems in April.  Most of the losses are in the 4-6 mmt. range, but there’s still a lot of uncertainty.  The Buenos Aires Grain Exchange is still at 56 mmt., down 3 mmt. from the start of the year. They had harvest at 41% complete. Even Informa is lower at 55 mmt.
   # Weather is playing into the mix, with the next week expected to generally stay on the wet side, slowing activity.  Both the 6-10 and 8-14 day forecasts indicate cool conditions will dominate the next couple of weeks.  Precip is expected to be a little above normal for much of the Midwest, except for the drier pattern across the upper Midwest.
   # The latest forecast do include some showers across parts of Argentina for the early part of the week; temps will stay a little on the cool side.  Mato Grosso Brazil will only see widely scattered showers, and then mostly in the southern and western areas.  Temps will be warmer than normal. 
   # The trade will likely home in on the corn carryout numbers initially, especially the new-crop one that’s expected to be near 2.2 bln. bu.  The new-crop soybean carryout is expected to be just over 400 mln. bu.  The industry is looking for a winter wheat production estimate close to 1.372 bln. bu.  New-crop carryout is expected to be just over 1.0 bln. bu.
   # Friday’s April jobs number, 160,000, was well under what analysts had anticipated.  It triggered commentary/talk that the Fed may put off raising rates when they meet in June.  Unemployment was unchanged at 5%. 

***** Live cattle ended $1.10-$0.47 higher, feeders $0.57 lower-$0.57 higher, and lean hogs $1.05-$0.25 lower. ***** 

   # Wholesale beef ended the day lower, with pork cuts moderate lower too.  Cattle prices ended at the lower end of last week’s trade on a very small volume.  Hog prices were slightly higher at the end of the day
   # Hog slaughter continues run a little ahead of expectations, causing some question on the accuracy of the last report.  Cattle/beef traders continue to see signs retailers are gearing up to use beef more in the store features.