AgriVisor Afternoon Marketwatch

Friday, December 02, 2016
***** Corn futures closed 4-5 higher; soybeans 1-2 lower; Chicago wheat mostly 8-9 higher. *****  

   # The big story in the grain pits was short covering.  A softer Dollar and firm crude oil might have helped, but the extent of the break and the low prices, especially in the 2 grains, made few want to go home short. 
   Wheat may have found some support from the fast wind down of deliveries against December futures.  Both Chi and KC have notices posted through yesterday.  There have still been no corn contracts tendered, while soy products are winding down as well.  
   The big talk in the soybean trade has been China shifting buying from US to S. America.  Rumor has them buying as many as 15-30 cargoes from there this week.  Our business appears to have been but a handful,  but it is time for the business to gravitate south.  
   The uncertainty about the Australian wheat crop persists, but most of the attitudes are bias to the high side of the 28-32 mmt. range.  Their govt. will issue a crop report next Friday. 
   # The USDA will issue new s/d numbers next Friday.  Generally it’s a dull report, but in the wake of the Nov. EPA announcement on renewable fuels, keep an eye on soybean oil, and maybe corn.  
   S. American planting/harvest is going well.  Brazil may be over 90% done with soybeans next week.  Argentina is 46% done with soy and 43% done with corn, both a little behind, but not of concern.  Wheat harvest is 29% done; yields and quality look good so far.
   S. American weather remains generally good.  Northern Brazil should be showery into late next week.  S. Brazil/Arg. will have showers interspersed with dry days.  Temps will be near normal.
   # Crude oil held firm to end the week after the apparent OPEC deal, one that could also include participation by Russia, an outsider. It’s the first attempt to cut output since 2008. The bigger unknown is whether all parties hold up their end of the bargain; OPEC is notorious for cheating.
   The Dollar slipped a little after Friday’s jobs report.  Lower wages effectively offset the increase in jobs numbers.  Unemployment is at the lowest in 9 years.  The trade is all but certain the Fed will raise rates later this month.  

***** Live cattle futures ended $2.50-$1.62 lower; feeders were $2.67-$3.17 lower; hogs were mostly $0.05-$0.32  lower. ***** 

   Wholesale beef ended slightly lower for the day with choice at $189.72.  Cash cattle held steady Friday, with live trading at $114 in light action.  Profit taking kept futures on the defensive, with the weaker wholesale trade adding to the mix.  Feeders followed.  
   Wholesale pork prices were low Friday, with the #2 cutout at $73.25.  Cash hog prices were near steady.  Live prices are finding some support from packers scheduling another large Saturday slaughter to keep ahead of supplies.  Futures were caught between weak cattle futures and firm cash prices.