AgriVisor Morning MarketWatch

Monday, March 06, 2017
***** Corn futures up fractionally ahead of the break; soybeans higher by a nickel; Chicago wheat up 5 to 6 cents. ***** 

   # Grains trade firmer overnight with wheat futures leading the way.  The soy complex finds some support from higher Asian palm prices, but lower Chinese bean futures put a damper on the enthusiasm. 
   # USDA’s WASDE tables are to be updated on Thursday at 11:00 am central.  Analysts do not look for much to come in the way of adjustments to U.S. carryout estimates, but changes to the South American production numbers could be impactful.  The average survey response calls for Brazil’s bean output estimate to be revised up from 104 to 106 million tons with that country’s corn crop expected to grow at least 1 mt from the previous 86.5 mt.   
   # Dry conditions in the Southern Plains help to keep the wheat bear at bay.  The forecast does not apply high odds to the region receiving rains in any sizable amount over the next two weeks.  The 6-10 and 8-14 day outlook maps lean warmer in southern half of the country, normal to cooler in the northern half.      
   # Rain showers over much of Brazil this weekend further interrupted harvest progress for soybean growers there.  Roads still wet, traffic jams are only slowly clearing to free up grain trucks that were on their way to ports along the Amazon River.
   # More rain and some snow is expected to fall over the U.S. Pacific Northwest early this week to make it difficult for shippers to make much headway on efforts to clear the region’s very congested ports.  Traders were talking last week about Japan having to reach into emergency stockpiles after having faced delays on receiving corn shipments from the U.S.   
   # Cotton futures rally to fresh highs as Chinese demand proves strong and Indian exporters still struggle to compete.  Chinese officials are auctioning cotton from state-owned reserves, so market participants will keep an eye on that this week.  
   # Interest rate markets have priced in a nearly 100 percent chance of a March Fed funds rate hike this month.  Central bankers meet to vote on the rate change on March 14-15.       

***** Cattle futures look to open steady/softer; same for hogs. ***** 

   # Cattle futures have found support from a firmer cash market.  Rising beef prices have helped out, but slower movement and relative weakness for the more expensive cuts do not signal well for demand going forward.       
   # Hog slaughters are running just slightly behind last year’s pace but are starting to pick up.  Accelerating production combines with softening packer margins to turn the fundamental bias negative.  April hog futures start with a test of technical support at last Friday’s $66.02 low.