AgriVisor Afternoon Marketwatch

Monday, December 12, 2016
***** Corn futures closed 1-2 higher; soybeans 5-6 lower; Chicago wheat 1-2 higher. *****  

   The absence of any significant news allowed the grain markets to mostly drift sideways, albeit the soybean complex seemed to have a bit more of a negative bias to it.  Much of that may have come from uneasiness/uncertainty regarding Trump’s China policy.  
   Export numbers weren’t bullish or bearish.  Inspections were: 67.5 mln. soybeans, 33.9 mln. corn, and 16.2 mln. wheat.  256,000 tons of soybeans were reported sold to China, with another 100,000 tons of sorghum sold to them as well.
   Saudi Arabia reportedly bought 750,000 tons of HRW over the weekend.  Given the current world price structure, much, if not all, is expected to come to the U.S.  Algeria is said to be tendering for wheat, with the total expected to be as large as 400-500,000 tons. 
   # China’s soybean crush margins are thought to be at 2, and maybe 3 yr. highs, which should bolster imports.  This marketing year’s crush is thought to be as much as 2 mmt. higher than last year. 
   Weather continues to be a big story.  Midday model runs  hinted shower amounts and coverage in Argentina were less than previously forecast.  Even longer range outlooks for Argentina and southern Brazil are drying out somewhat.  Northern Brazil continues to have decent activity.
   The condition/situation in our S. Plains continues to deteriorate, with little snow cover across the region going into the year’s first cold wave.  But at the moment, the slippage in moisture seems to be of most concern.  And the problems in the Southeast remain, with some scant evidence the pattern is shifting a little north and west. 
   OPEC'S agreement with some outside producers to rein in production triggered strong gains in the crude market Monday.  Nearby futures have gotten to their highest levels since summer 2015.  The Dollar slipped because of the surge in crude prices, with the currencies of commodity producers especially strong.  Meanwhile the wait continues for Wednesday’s Fed decision on interest rate policy.

***** Live cattle futures ended $2.42-$1.40 higher; feeders were $2.60-$1.72 higher; hogs were mostly $0.65-$0.02 higher. ***** 

   Wholesale beef ended slightly higher for the day with choice at $189.56.  Cash cattle were  quiet to start the week, but are expected to hold firm with the extreme cold dropping into the Midwest at week’s end. Feedlot showlists are about the same as last week.
   Wholesale pork prices were slightly higher, with the #2 cutout at $76.38.  Cash hog prices were a little firmer with weather and good margins making for an optimistic short term attitude.