AgriVisor Morning Marketwatch

Wednesday, February 22, 2017
   ***Good Morning***

***** Grains are slightly higher to start the day; soybeans 3-4 higher, corn 1 higher, with wheat 2-3 higher. *****

   # Acreage is going to come into focus today with the USDA set to release their “estimates” for planting at tomorrow’s Outlook Forum.  There’s some focus on the Fed. Reserve this morning too, with the latest set of minutes to be released later today. 
   # Bloomberg has released analyst expectations for acreage ahead of tomorrow’s USDA meeting.  The numbers are: corn 90.8 mln., down 3.2 from last year, soybeans 88.3 mln., up 4.9 mln., wheat 46.5 mln., down 3.7 mln. There are stories out this morning, as there’s been all winter talking about economics forcing the shift.
   # The corn, soybean, and wheat crops are expected to be 14.112 bln. bu., 4.214 bln. and 1.896 bln. bu. respectively. The ending stocks are expected to be projected close to 2.072 bln. bu., 485 mln., and 969 mln. bu. respectively.  
   # Talk in the wheat trade this morning is more about the technical aspects than the fundamental ones with prices breaking so hard the last 2-3 days.  Some offer the illusion that funds might return to the sell side after being forced out of shorts on this last rally.  Some are talking of the various classes coming back into a more normal alignment.  There’s also some discourse about the crop breaking dormancy early, and the risk that presents. The Texas crop is 30% good/excellent, compared to 41 last year. 
   # Egypt did issue another buying tender last night.  They have 9 offers, with Russia accounting for 7 of them.  Results will come later.  But for our markets, the importance comes with price and quantity as the U.S. is still priced out. 
   # India is also said to be demanding that any wheat imported be gassed with Methyl Bromide to kill any fungus.  Nearly all of the primary exporters have banned it’s use. India is basically using the move to slow imports going into what looks like a good harvest.
   # The problems moving grain out of the PNW continues to be an issue with rains slowing loadings and snow/mudslides halting rail transportation.  This has been a key issue for wheat, HRS in particular, but has also had some impact slowing corn and soy out of PNW.  
   # The trade is still talking about S. American weather from a positive perspective.  Generally, forecasters see light showers with some localized heavy amounts in both Arg. and Brazil, but no generally heavy rains.  But, the showers in Brazil could impede planting of 2nd crop corn, a feature that’s become an increasing worry. 
   # In the U.S., the S. Plains have become an increasing focus, especially with wheat starting to break dormancy.  Moisture is thought to be OK for now, but looking at soil moisture profiles, rain will be needed as the crop greens up. 
   # The Forex/Financial/Equity trade is eyeing the release the latest Fed minutes later today.  Traders/investors will glean them to understand possible Fed moves, especially with various officials offering different insights the last few days. Everyone is interested in timing and pace of rate increases. Two Fed officials will be speaking later today too. The Dollar was slightly higher, with the B Pound one of the weakest.  U.K. inflation data came in slightly under expectations.  

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

   # Wholesale beef is mixed(choice up/select down) with choice at $191.81.  Cash cattle are expected to trade slightly higher this week. At the moment though the bid/offer spread is unusually wide, likely pushing activity to week’s end. 
   # Wholesale pork was slightly lower at $84.54. Cash hog prices are expected to hover near current levels with little direction.