AgriVisor Morning Marketwatch

Tuesday, March 07, 2017
   ***Good Morning***

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

   # Significant news continues to be somewhat limited, with the trade looking ahead to Thursday’s reports, CONAB on Brazil early and USDA midday. 
   # Yesterday’s new weekly condition ratings for wheat in the S. Plains didn’t offer much guidance with little change from the numbers the week before.  But with the good/excellent ratings ranging from 43% to 34%, and the somewhat dry conditions in the S. Plains, these reports start to take on importance.  Weather forecasts don’t include much chance of significant moisture this week. This week’s turn to colder temps will slow growth, limiting the need for moisture.
   # Talk is still occurring regarding Chinese interest in SRW, but given the large inventory the govt. owns, any purchasing will be limited, with any imports simply used to help raise the quality in flour blends. 
   # The discovery of a case of bird flu in Tennessee is not going unnoticed.  Japan and Taiwan have blocked poultry imports from the state, with S. Korea blocking them from the U.S. as a whole.  The bigger worry is that bird flu doesn’t tend to be isolated, igniting fear of a downward shift in feed demand until it’s resolved. 
   # Discussions/news stories about  biofuels persist.  It’s becoming increasingly likely that change is coming, but no one is certain of the exact form these changes will take, nor the implications they might have. Administration officials indicate they don’t have an official position on the changes that have been rumored. 
   # Brazilian farmers are said to be slow sellers of soybeans at present.  Low prices and transportation issues are a part of the mix.  It’s said it might take R$75/bag in the south and R$70 in the north to trigger new sales; current prices are about R$10 lower than that.  The Real has eased a little over the last week, but remains generally strong. Brazil’s harvest is thought to be 47% done, compared to 41% last year. 
   # Palm oil ended a 5-day streak of higher prices.  Malaysian palm exports look to have dropped 12-14%.  The trade still talks about expanding output this year.  And the market has temporarily lost the support of biofuels/soybean oil rumors.
   # The Dollar was steady against most European currencies in the overnight trade.  Support is coming from talk of an increase in U.S. interest rates at the Fed meeting next week.  The G20 meeting comes later this month, with attention being focused on trade imbalances likely to be a key topic given the new Administration’s  focus on trade. Global stock markets were mostly mixed.

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

   # Wholesale beef is higher with choice at $209.60. Cash cattle trade was slow to start the week, but asking prices are thought to be as high as $128.  One plant is closed for maintenance cutting into demand for this week.  The premium cash has to April and June will tend to enhance the possibility for sales to be active to capture the positive basis.
   # Wholesale pork was higher at $82.53. Cash hog prices will be steady/firm today, but could edge higher through the week with good packer margins and winter like weather on the way.