AgriVisor Morning Marketwatch

Tuesday, October 04, 2016
   ***Good Morning***

***** Grains are starting the day mixed; soybeans 3-4 lower, corn fractionally higher, with wheat 1 lower. *****

   # FC Stone’s new crop estimates are probably the key ingredient driving the grain markets as we start the day.  They raised their soybean yield estimate to 52.5 bu. from 50.1 bu. last month.  They put their production estimate at 4.357 bln. bu.  They lowered their corn yield estimate slightly, from 175.6 bu. to 175.2.  Their production forecast is 15.163 bln. bu.  New USDA numbers come on Oct. 12. Trade estimates will be out later this week.
   # The weekly crop progress numbers were not significantly different than expected.  Corn harvest is 24% complete, 1 point less than the trade anticipated.  The soybean harvest is 26% complete, 1 point more than expected.  The soybean condition rating jumped 1 point to 74%, with a smattering of changes in various states.  The corn rating fell 1 point to 73%.  Winter wheat planting is 43% done, just under the average for the date.
   # A midweek weather system is expected to slow harvest, and will persist to some degree into the weekend.  The 6-10 day outlook is wet in the western Corn Belt and Great Plains, but the longer range outlook turns dry again, with warmer temps on the way too. 
   # Maybe a bigger weather feature to watch is the hurricane in the Caribbean.  The latest forecasts show the path taking a more westerly drift, potentially moving up the eastern seaboard.  That would have negative repercussions for the crops in the Southeast.
   # There’s a lot more focus on the wheat market.  The spring market is holding firm behind the lower spring crop Friday, rains in Canada, and somewhat lower quality/protein of the large world crop.  Chi and KC are expected to stay weaker to fight for feed demand.  
   # The monthly soybean crush report, 141 mln. bu. was about as expected.  But soymeal stocks were down more than soyoil, which could help long soymeal/short soyoil spreads persist.  There’s also talk this morning about bull spreading soymeal, long the front/short the back.
   # Palm oil was at a 2 week low this morning, with prices falling because the Malaysian Ringgit was higher.  
   # It’s important to keep in mind this week is the Golden Week Holiday in China.  That will subdue news coming from one of the world’s key players.  Amid that, there is a story floating around they are considering some kind of import tariff on soybeans to help encourage the shift from planting corn to soybeans. 
   # S. America will remain on the radar screens the next few weeks with the planting season underway.  There aren’t any significant weather issues yet with scattered showers in the mix for Arg. and southern Brazil.  Showers occur in northern Brazil, but tend to be light and widespread so far.  This is the time when the rainy season tends to begin.
   # The Dollar is broadly higher today on a little more upbeat assessment of the U.S. economy.  The B Pound is suffering the most on concern about how Brexit is going to affect the Pound’s value.  

***** Cattle should start the day mixed; lean hogs steady/weak. *****  

   # Wholesale beef is slightly lower with choice at $186.62. Feedlot showlists are said to be a little smaller this week. There won’t but much action in the cash trade today, but if there is, it will still be weak.
   # Wholesale pork was near steady at $73.92. Cash hog prices are expected to be steady/$1 lower.  The market’s still reeling from the slightly negative USDA report Friday.