AgriVisor Afternoon Marketwatch

Tuesday, November 08, 2016
***** Corn futures closed 7-8 higher; soybeans 12-13 higher; Chicago wheat 4-5 higher. ***** 
   # Much of the strength in the grain pits can be attributed to fund short covering or new buying in anticipation of a Clinton win today.  At the same time, there were some minor features in the oilseed complex that helped guide everything higher.  
   # Tomorrow’s USDA report will be the key guiding influence, other than the sentiment from the election.  The trade is looking for USDA to lower the corn yield 0.2 bu. to 173.2, and raise the soybean yield to 52.0, up 0.6 bu. from last month.  From a historical perspective, the soybean yield estimate seems high to us, possibly tilting the odds a little more friendly and less bearish, and the trade may be sensing that.
   # Soybean oil was again the upside leader in the soy complex.  Palm oil prices in Malaysia rose to 2 year highs today, keeping the vegoil markets on the boil.  That’s not to say soymeal is being left out.  For the 2nd consecutive day, there was a soymeal sale large enough to report, this time to the Dominican Republic.  It will be interesting to see what sales were last week on Thursday’s report. 
   # Weather may be playing a small part in the gains, but other than wheat, it’s much too soon to worry about soil moisture.  Weekend rains were disappointing in the S. Plains, while the forecasts remain dry, bringing some worry about new-crop potential.  The other droughty pockets including the Southeast, are garnering some talk, but mostly the La Nina numbers stay neutral.  Even the Australians aren’t convinced about a La Nina forming the rest of this calendar year. 
   # Egypt bought 240,000 tons of wheat overnight from Russia/Romania.  The prices appeared a little higher than the trade was anticipating.  News from Ukraine implies the milling wheat share of their crop is a little larger than last year.
   # Mato Grosso in northern Brazil reports that soybean planting is heading to completion ahead of normal.  This could put new-crop into the pipeline by early/middle February.  More important, it would allow for the 2nd crop corn to be planted more timely, implying better yields this year.
   # U.S. equity markets ground a little higher at days end, with indications that Hillary Clinton will likely prevail in her campaign for President.  But activity was somewhat lighter following Monday’s surge.

***** Live cattle futures closed $0.95 to $1.35 higher; feeders $2.05 to $2.97 higher; hogs $0.12 lower to $0.57 higher. ***** 

   # Wholesale beef prices closed lower today, with choice at $185.34, down $1.93 on the day.  The cattle trade is still limited early in the week, but a softer wholesale market is likely to keep a lid on cash cattle prices.  Keep in mind, November is not a robust demand period for red meats. Most of the futures buying came from short covering after a modest 3 day decline.
   # Wholesale pork prices were steady/weak, with the #2 cutout ending at $74.24.  Cash hog prices were mostly about $0.50 lower with the Iowa average at $42.08.  The CME cash index continues to fade, currently standing at $50.46.