AgriVisor Morning Marketwatch

Wednesday, March 08, 2017
   ***Good Morning***

***** Grains are slightly lower to start the day; soybeans 5-6 lower, corn 1-2 lower, with wheat 2-3 lower. *****

   Talk about the larger Brazilian crop estimates continues to be the dominate feature guiding prices lower this week.  CONAB’s numbers tomorrow morning should temporarily clarify the potential.
   Yesterday’s Brazilian estimates from FC Stone and Celeres started the latest round of pushing Brazilian production ideas higher.  FC Stone projected 109.1 mmt., with Celeres at 109.6.  Some are said to be pushing Argentine crop ideas to record territory, but given the acreage and flooding issues they have had, there’s less universal optimism. Paraguay yields are being reported as very good too, but the smaller area will limit production increases. 
   The growing expectations are not just limited to soybeans either.  Recent talk has lifted Brazilian corn crop estimates higher, with the highest number we have seen at 93 mmt.  There’s a little more caution with this crop, with 2nd crop planting still not complete.  Moisture is good, but the dry season tends to start in mid-March making projections more difficult.
   The case of bird flu in Tennessee continues to be discussed.  Discovery of another, less virulent strain in a turkey flock in Wisc. has added to the anxiety about the implications for feed demand.  So far, the cases seem to only be having a limited impact on poultry export activity.  
   Chinese soybean imports in February were 5.54 mmt. Even though that was down sharply from the recent pace(7.66 in Jan), it was still 23% higher than last year.  February is a typically a slow month for imports with shipments shifting from the U.S. to S. America.  There’s another slow period in late summer.
   Talk about good conditions for wheat in the Black Sea and Europe are a drag on wheat prices today, along with the weakness in the other grains.  Conditions in our S. Plains and little prospect of rain limited declines overnight.  
   # There is a story circulating the trade that Egypt rejected 3 cargoes of wheat, 2 from Russian and 1 from Argentina.  How this might impact their future purchasing patterns may be the bigger story.  The Argentine cargo is said to be rerouted to Morocco.  Turkey, Japan, Jordan, and S. Korea have been other players in the trade this week.
   The Dollar moved higher in the early trade today on a private report showing 298,000 jobs were added in February.  The trade is already looking ahead to Friday’s govt. report.  A positive number there would cement expectations for a Fed rate hike next week.  Equity markets are generally firm, but financials are mostly lower.
   The weekly ethanol petroleum report comes at 9:30.

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

   Wholesale beef is higher with choice at $212.00. Cash cattle trade has been slow to start the week, but trading has occurred either side of $125, with offers said 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 lower at $81.71. Cash hog prices will be steady/firm today, and could edge higher through the week with good packer margins and winter like weather on the way.