AgriVisor Morning Marketwatch

Monday, August 29, 2016
   ***Good Morning***

***** Grains are narrowly mixed to start the day; soybeans 4-5 lower, corn 1 lower, with wheat 8-9 lower. *****

   # The grain markets are still playing with the hangover of last week’s Midwestern crop tour.  Friday’s surge in the Dollar, and this morning’s modest strength are playing their part as well.  Pro Farmer projected a 170.2 yield for corn, below the USDA.  But their soybean forecast, 49.3 bu., was higher than the USDA.  The latter must have come from the pod count and the soil moisture data they collect, the latter which is subjective.  But from weather data, we know moisture is abundant this year. 
   # The Dollar got its boost Friday from Fed Chairman Yellen’s remarks that raised the bar for a possible hike in their rates in September.  That same attitude is carrying through the early morning trade.  The trade is looking ahead to new inflation data dn personal income/spending data for July.  Friday, the market gets data for the August job market. 
   # There was a story circulating Friday about the possibility China could import corn sooner than anyone anticipates.  But the possibility hinges on the quality of those govt. inventories everyone worries about.  This story outlined the “what if” they are so poor they can’t be uses for much of anything.  AT this point, we’d chalk that story up to “idle speculation.”
   # While everyone talks about the price of soybeans in Brazil, few talk about production costs.  Embrapa expects the cost of soybean production in Mato Grosso Brazil to rise 11-12.5% this year, with the latest genetic varieties being the most expensive. 
   # Interestingly, the new Argentine President increasingly points to agriculture as the engine leading the economic recovery.  Given that, there should be continued focus on agr. policy over the next number of months. 
   # A Chinese buying mission is expected to be in the US this week.  Talk seems to center on the possibility they will buy 3-4 mmt. of soybeans.  With the old-crop sales that will be carried into the new crop-year, we will start the marketing year with a big export book. 
   # There’s still a lot of turmoil occurring within the Egyptian wheat purchasing division, leaving their activities somewhat suspect.  Over the weekend, there was talk they may revert back to a zero ergot stance which could stifle business.  On Friday they did buy 180,000 tons from Russia.  
   # The palm oil industry expects prices to rise further later this year. This year’s cut in output because of weather and good biodiesel demand are expected to lift/support prices before output will increase next year. 
   # Weather is a mixed bag.  Temps will be warmer than normal from the Great Plains east.  Moisture will be normal/below normal from Central Ill south, with above normal amount across the far northern Plains and northern Midwest states.
***** Cattle should start steady; lean hogs steady/weak. *****  

   # Wholesale beef was slightly lower, but the market seems to have good underpinnings under $200 choice.  Cash cattle slipped slightly lower yesterday with live at $110-$113, and dressed at $175-$179 
   # Wholesale pork was near steady, but cash hog prices were slightly lower.  Wholesale demand for both meats remains somewhat tepid, maybe unusually so ahead of a holiday weekend.