AgriVisor Morning Marketwatch

Tuesday, December 13, 2016
   ***Good Morning***

***** Grains are mixed to start the day; soybeans 4-5 higher, corn fractionally lower, with wheat 1-2 lower. *****

   # The focus the next couple of days is going to be on the Fed meeting that is slated to wrap up tomorrow.  Analysts have long looked for the Fed to raise their benchmark overnight rate 1/4 point at this meeting.  But all indications, the current rate of interest rates are thought to have already fully priced in this increase.
   # Weather is the other feature in play.  Snow cover is essentially absent in much of the S. Plains, along with broad swaths across the Black Sea area.  Cold air is slated for the Midwest this week.  The 6-10 day outlook remains cold, with temps expected to return to normal in the Midwest in the longer range outlooks.  Temps are expected to fall much below normal across much of the Black Sea region in the short term too.
   # South American weather remains a part of the mix.  Warm, dry conditions are to persist into week’s end in Argentina and southern Brazil.  Showers are forecast to start in the weekend.  Northern Brazil is expected to continue to have showers over the week.  
   # There are reports the Chinese govt. is forcing some crush plants to close for environmental reasons.  Plants that have been closed represent about 5% of capacity. But, China has long been laden with excess capacity to crush soybeans.  Margins are said to be the best they’ve been for 2-3 years, stimulating remaining plants to sustain an aggressive pace, keeping overall processing high.
   # There has been some talk processors have been stockpiling soybeans ahead of an expected further decline in their currency, the Yuan.   The talk is the Yuan/Dollar exchange rate could drop to 7:1, about 14 cents.

***** Cattle should start the day steady/slightly higher; lean hogs steady/firm. *****  

   # Wholesale beef is slightly higher with choice at $189.62. Cash cattle prices are expected to be steady/firm after sagging late last week.  Beef demand seems to be holding firm, a normal seasonal aided by this year’s lower prices.
   # Wholesale pork was slightly higher at $76.38. Cash hog prices should be slightly higher with packers wanting to acquire animals ahead of the late week cold weather.