AgriVisor Morning Marketwatch

Monday, September 26, 2016
***** Grains are starting the day on a softer note; soybeans 1-2 lower, corn 2-3 lower, with wheat 1 lower. *****

   Most of the talk as the week starts is about tonight’s Presidential debate, not so much on economic or financial news.  Harvest news mostly dominates the grain trade, although there seems to be a stream of steady news out of India gaining some attention too.  
   The harvest pace is very uneven, with an extremely active harvest east of the Miss River, and a rain interrupted one west of it.  There were rains in the western Corn Belt and Great Plains over the weekend subduing activity.  No one has ventured a guess on harvest for this afternoon’s report, but it won’t be a stellar number given last week’s heavy rains in the western Corn Belt. 
   India is cutting their vegoil import tariffs to help deter inflation.  Crude palm oil’s will drop to 7.5% from 12%.  Refined vegoils’ will drop from 20% to 15%.  Meanwhile Indonesia is going to reinstitute a $3/tonne export tax on palm oil, a move that should help shift interest to other vegoils. Meanwhile, Malaysian palm oil exports are declining. 
   ON Friday, India had lowered their wheat import tariff to 10% from 25% to help spur imports of that foodstuff.  The shift seems to fit with talk they need to import as much as 5 mmt. this year. France and Ukraine have sold them wheat so far.
   Weather forecasts suggest the western Corn Belt should see a much needed drier pattern this week, with the eastern Corn Belt potentially seeing some late week rains.  The longer range forecasts show the central/eastern Corn Belt remaining mostly dry, with areas to the west and north mostly wet, especially the N. Plains.  But as one forecaster pointed out, the models seem highly variable on a day-to-day basis. 
   Yield reports continue to be highly variable for corn, with the soybean yields still having a tendency to be good.  But, it’s important to remember the USDA is already forecasting a new record by 2.6 bu. with the current forecast 15% over 2009’s record high; that’s a big shift in a short period.
   Soybeans, and even corn continues to enjoy demand positives.     We saw one calculation implying today’s soybean inspections could be over 60 mln. bu.  If so, it would reinforce potential for strong fall/winter soybean exports. 
   There will be some discussion about Friday grain stocks/wheat production numbers coming Friday, but given the current supply picture, the outcome isn’t likely to have a huge market impact like in some past years.
   There is a lot of discussion going on in the energy sector.  Saudi Arabia has extended an offer to Iran to reduce their export quotas if Iran will cap theirs.  It may not happen yet as Iran wants to get exports back to pre-sanction levels before they consider caps.  The Dollar is still reacting to the Fed rate decision.  There’s also some hesitancy in the currency markets, as well as equity markets, ahead of tonight’s debate.  

***** Cattle should start steady/slightly higher; lean hogs steady/lower. *****
   Friday’s cattle numbers were very close to expectations, with an ever so slight negative twist regarding marketings.  Wholesale beef was steady/weak, but the tone of the market was firm.  Cash cattle slipped slightly last week, and with larger offerings could be a little softer this week
   Wholesale pork was slightly lower.  Hog numbers remain plentiful, with a slight downward bias in the cash hog market.  There is a quarterly USDA hog report coming Friday.