AgriVisor Morning Marketwatch

Tuesday, December 20, 2016
   ***Good Morning***

***** Grains are lower to start the day; soybeans 8-9 lower, corn fractional-1 lower, with wheat 1-2 lower. *****

   # Dollar strength, Argentine rain potential, and lighter volume, holiday trade are all contributing to the weakness across the grains
   # Dollar strength seems to be mostly coming from the terror attack in Germany yesterday, with the Euro the weaker currency across the sector.  There’s talk the Euro-Dollar could be headed for parity. The Japanese Yen also moved higher after the Bank of Japan left their monetary policy unchanged. 
   # Egypt has an outstanding tender to buy wheat.  Most of the offers have come with Russian origins, but there was an offer from Argentina, with a lower price than the Russian offers.  Results will be out this morning.  
   # There’s ongoing debate on in the wheat trade about the extent of the winter kill damage from the weekend cold.  However, it’s always difficult to assess winter kill, with the best signs of problems coming closer when the crop starts to exit dormancy. There is some talk about winter kill in the Black Sea region, but details are limited.
   # The cold threat to the U.S. winter crop is also being assessed against the background of dry conditions. 22.7% of the G. Plains are rated as being in drought, against 10.7% three months ago.
   # Argentine weather remains a key ingredient in the grain weakness.  Some are wanting to talk up the idea weekend rains were better than expected, but dry areas still persist.  Late week/weekend weather is forecast to bring more rains again.
   # Palm oil prices were sharply lower overnight.  Weakness in other vegoil markets and poor Malaysian export data were behind the decline.   Exports were 14% off from the same period last month. 

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

   # Wholesale beef is higher with choice at $195.39. Cash cattle prices are expected to be near steady, but could soften a little with holiday shortened slaughter weeks coming.  The industry will be watching beef movement closely through the holidays.
   # Wholesale pork was slightly higher at $78.59. Cash hog prices should be steady, but could weaken with the warmer weather.  Movement could also be enhanced ahead of Friday’s USDA hog report and the holiday reduced slaughter.