AgriVisor Morning Marketwatch

Tuesday, October 25, 2016
   ***Good Morning***

***** Grains are mixed again; soybeans 2-3 lower, corn 1 higher, with wheat 1 higher to 1 lower. *****

   # Other than the weekly crop progress/ratings, there wasn’t a lot to affect the grains overnight.  Hence, much of the overnight action was a reaction to yesterday’s moves. 
   # Open interest in wheat futures went up on yesterday’s decline, a negative feature. Soybean open interest was down slightly, with soyoil and soymeal up slightly, all slightly positive. Corn open interest was up slightly too, a slight negative considering it was a down day.  Still, it’s the trend of changes over a number of days that is more important than any single day.
   # Soybean and corn harvest were about the pace the trade anticipated, 76% soybeans and 61% corn.  Soybeans were 1 point less than expected, and corn 1 point more.  Winter wheat planting is 79% done, slightly short of the avg.  The first condition rating, 59%, was as expected, but higher than last year’s 47%. 
   # FC Stone believes Brazilian soy planting is 29.8% done, a pace normally seen in the very early part of Nov. In Mato Grosso alone, planting is thought to be 42% complete, again ahead of schedule.  That would help get 2nd crop corn in the ground a little earlier this year.  They believe high corn prices will encourage a large 2nd crop planting.  Conditions are good as a whole, except for wetness in Rio Grande do Sul and dryness in northeastern states. 
   # A closely watched analyst doesn’t believe the 5% reduction in soybean export taxes for northern Argentine states will have much impact on acreage.  But the other part of the plan, a 0.5% reduction in taxes each month starting in January 2018 will become an incentive for Argentine farmers to hold soybeans off the market as much as possible into 2018-2019 as long as the quality is good at harvest. 
   # Palm oil futures were off as much as 1.8% in the overnight trade on profit taking. Traders think it may take proof of persistent production problems on next month’s Malaysian report to keep the palm oil rally intact.  Still, trees are thought to still be struggling with lingering effects of last spring’s El Nino inspired drought. 
   # Wheat traders are going to again watch for the results of the overnight Egyptian tender.  Last week, the low offer was from the U.S., but it was hard, not soft, wheat.  Russian origins are expected to be preferred even though their prices have risen.  But the results of that tenders sparked last week’s wheat rally. 
   # There seems to be a fair amount of discussion in the overnight comments about Nov. soybeans inability to get through $10 yesterday.  That may have set it up as an important psychological points. 
   # China has officially halted sales of corn from their reserves to shift commercial buying interest back to their producers.  There’s still wide ranging estimates about how much corn the govt owns. 
   # As a whole, Argentine weather has been a little too wet, with flooding occurring in some spots west of Buenos Aires.  It’s thought more corn planting will be shifted to their later window. Midweek showers will give way to a drier pattern again. Brazilian weather is the same, with the drier pattern coming with the weekend. 
   # Our longer range forecasts tend to project warmer than normal temps across the Midwest the next couple of weeks.  The 6-10 is still on the dry side, but the 8-14 day is tilting toward a slightly wetter pattern, especially in the western Corn Belt and G. Plains.  Some forecasters are talking about November weather turning much colder.  NWS will have new monthly outlooks on Thursday.
   # The forex, equity, and energy markets are all trading very close to steady as we start the trading day.  Talk about Fed policy and when they will raise rates seems to be dominating the focus. 

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

   # Wholesale beef is slightly higher with choice at $180.98. Feedlot showlists are said to be a little smaller in the south this week; slightly larger in the north. Cash prices could firm if futures hold firm.
   # Wholesale pork was slightly higher at $72.96. Cash hog prices could be slightly firmer again today, but midweek weather might put them on the defensive again.  Supplies continue to run a little heavy.