AgriVisor Morning Marketwatch

Tuesday, November 29, 2016
   ***Good Morning***

***** Grains are lower this morning; soybeans 12-13 lower, corn 2-3 lower, with wheat 3-4 lower. *****

   # Much of the overnight trade can be termed profit taking in the wake of the strong surge, especially the one in the soybean complex over the past week.  Weakness in the crude oil market, and less certain short term direction in the financial/equity/forex markets may be contributing.
   # Malaysian palm was lower, tracking both the softness in Chicago and the Chinese markets.  But after hitting a 4 week peak late last week, softness isn’t seen as much of a surprise. Key analysts are still touting positive expectations for the 1st qtr.
   # CFTC data may be contributing to the easing.  The week ending last Tuesday showed hedge funds had expanded their long position in soybeans.  They increased their long position in soymeal, but reduced their long position in soyoil.  They pared their short positions substantially in both corn and wheat.
   # The soybean market could be feeling some pressure from the steady slippage of the CIF basis at the Gulf, now quoted at 20 over the Jan.  The erosion is causing some to question how strong short term demand for soybeans is.  And, there are continual signs of producer sales in the interior with widespread $10 soybeans.  Wheat basis is steady, while corn is holding its own.  Still, the export numbers are generally robust keeping bears from getting too aggressive.
   # Brazil is said to be 83% done with planting, while Argentina is 39% done with soy.  Argentina is 48% done with corn.  There were weekend rains, and so far, the forecasts for the next couple of weeks still look promising for crops.  
   # USDA reported US wheat was 92% emerged.  The condition rating held steady at 58% g/e, but deterioration was noted in Ks. and Okla.  The latest drought numbers show no change for that region, but it is being closely watched by the trade.  Monday’s report was the last of the season, with selected states now to issue monthly updates until spring.
   # The wheat trade will be watching the results of the Egyptian wheat tender to see if the change in the Russian market will change the mix of sellers Egypt uses.  There’s also some added caution regarding Russian grain from some areas because of the appearance of bird flu.  Some believe that could change up the world trade for wheat/corn a little.  And logistics continues to be a problem in Ukraine.
   # Much of the commodity trade is watching news from OPEC talks in Vienna.  Daily, the attitude about the possibility of a new agreement seems to shift.  This morning, there’s some thought the Saudi’s may not be willing to do a deal unless everyone participates in the output cut, Iran and Iraq in particular.  One called the negotiations a high stakes poker game.
   # Meanwhile, the forex/financial/equity trade is trying to determine whether the “Trump” rally might be ending, or just taking a pause.  News surrounding the Italian referendum and the looming elections in Germany is on everyone’s radar.  Amid this there is a flurry of economic numbers from many countries guiding individual currencies, with the B Pound an Yen strength the most notable. 

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

   # Wholesale beef is slightly higher with choice at $188.00. Cash cattle prices could slip a little with the slightly larger showlists, but wholesale demand is expected to underpin the cash trade this week.
   # Wholesale pork was slightly higher at $74.81. Cash hog prices could be steady/weak, although there seems to be a less negative attitude regarding supplies.  Packer margins remain robust.