AgriVisor Morning Marketwatch

Monday, November 14, 2016
   ***Good Morning***

***** Grains are lower this morning; soybeans 7-8 lower, corn 2-3 lower, with wheat 3-4 lower. *****

   # Today’s weakness in the grains can mostly be tied directly to a big jump in the Dollar again.  As it has since the election, the Dollar is somewhat tied to the change in attitude with Trump’s election.  His policies are expected to be more pro-growth, bringing higher rates with them.  There’s more certainty too the Fed will tighten policy slightly in December.  The Mexican Peso was notably the weaker of the currencies, a fact also tied to the recent election.  Overnight data showed the Japanese economy grew at a faster than expected pace.  But, retail demand remains weak.  The Brazilian Real lost ground against the Dollar too, continuing its decline over the last week, and changing the competitive structure in the world. 
   # Chinese commodity markets continue to get significant attention, especially since a hedge fund was said to be forced out of long positions on Friday.  That in turn drug down Malaysian palm futures overnight, which undermined soy complex prices here in the U.S.
   # China’s Security Regulatory Commission is said to be banning brokers from providing margin financing.  It’s another move to try to rein in a speculative bubble.  One exchange that trades thermal coal raised their margin requirement the 4th time in the last 3 weeks. 
   # A private consultant, Ag Rural, believes Brazil’s soybean planting is 63% complete.  Argentina is thought to be 37% done planting corn, slightly ahead of last year.  But in some areas, excess moisture continues to be a problem. 
   # Russian winter grain sowings accelerated after a slow early start.  It’s thought the total area sown to all grains is 17.2 mln. hect., up 1 mln. from last year.  Some think the winter sowings could be the largest since 2009.  But the key to producing a good crop from the extra plantings will also depend on having limited winter kill too.  The last 2 winters were exceptionally mild. Forecasts indicate winter is finally starting to emerge in Russia, with parts of the Black Sea area expected to have below normal temps the next few days. 
   # Weather remains an element, both in the U.S. and S. America.  The U.S. will remain warm, but the long range forecast is starting to include more moisture for the Great Plains again.  Given recent dryness that is an important situation to track.  
   # Northern areas of Brazil will see showers this week, helping crop prospects.  But southern Brazil and Argentina will see the pattern turn drier the latter part of the week.  Initially that is good, as it helps planting, but there has been talk the extended pattern could stay drier.  With some forecasters indicating the Pacific is in a weak La Nina pattern, that could be an important area to watch.

***** Cattle should start the day slightly steady/firm;  lean hogs slightly weaker. *****
   # Wholesale beef is slightly lower with choice at $184.62. Cash cattle prices held near steady Friday with live mostly near $105.  The key going forward might be the re-emergence of wholesale demand, and it’s a little soon yet for a seasonal improvement. This week’s show lists are expected to be slightly larger.
   # Wholesale pork was near steady at $74.13. Cash hog prices could be slightly softer again today, although a slight uptick in slaughter activity this week could temper weakness.  Supplies continue to run a little heavy.