AgriVisor Afternoon Marketwatch

Monday, December 05, 2016
***** Corn futures closed 11-12 higher; soybeans 14-16 higher; Chicago wheat 2-4 higher. *****  

   The big story to start the week was a qtrly weather forecast out of Argentina pointing to higher probabilities of having below normal precipitation into February.  That’s the heart of their growing season.  And if they have subpar rains, the southern Brazil states are likely to as well.  While this is no guarantee of poor weather, it does highlight the sensitivity the trade is going to have regarding S. American weather after having so badly missed the late northern Brazil drought that hit corn output.
   # Along with that, the USDA reported a 426,000 ton soybean sale to China on the daily system.  At the end of last week, the industry had all but said the business was well along the way of shifting to Brazil, with little activity noted in the U.S. 
   ABARE released their latest forecast for their wheat crop, a 32.6 mmt. crop, as projected today.  That’s 4 mmt higher than forecast in September.   The great rains across the eastern part of the country was thought to have more than offset the earlier frost reductions across the west.  They also forecast a record large barley crop, 10.64 mmt., and a large canola crop, 3.6 mmt.  
   A story out of Ukraine indicted the condition of their winter crops, wheat and barley, are not nearly as good as they were a year ago.  While that doesn’t dictate a poor winter crop, it does indicate it could be more vulnerable to winter weather problems. 
   Export inspections were good, although were somewhat ignored with the other news.  70.2 mln. bu. of soybeans were shipped, 45.3 mln. of corn, and 16.7 mln. of wheat.  The 2nd week of lower soy numbers implies the weekly pace of shipments may have peaked, but they will still remain seasonally high.  But the lower soy shipments should allow corn shipments to improve from the fall pace.
   Activity in the financial/forex/energy markets were somewhat mundane Monday.  Mostly, the financial markets are waiting to see if the Fed does raise rates.  The energy sector is still sorting through uncertainty surrounding OPEC moves. 

***** Live cattle futures ended $0.10 higher-$0.22 lower; feeders were $0.27-$0.05 lower; hogs were mostly $0.55-$0.97 higher. ***** 

   Wholesale beef ended slightly higher for the day with choice at $191.39.  Cash cattle ended last week either side of steady, with cash around $1132-$114, but the trade is getting a little nervous with larger numbers that are starting to show in the slaughter pipeline.
   Wholesale pork prices were slightly higher, with the #2 cutout at $74.06.  Cash hog prices were a little firmer with weather causing some difficulty. 
   # Both hog and cattle traders are starting to watch weather closely with winter finally becoming a real feature.  So far, demand for both meats is holding up at the wholesale level.