AgriVisor Morning Marketwatch

Thursday, March 16, 2017
   ***Good Morning***

***** Grains are slightly higher to start the day; soybeans 5-7 higher, corn 2-3 higher, with wheat 2-4 higher. *****

   Late Dollar weakness in the wake of yesterday’s Federal Reserve announcement they were raising rates appears to be the primary element that lifted grains in the overnight trade, and early this morning.  Minor technical features are a part of the mix as well, with grain prices having dropped near some supports on this break and getting a little oversold in the short term. 
   Soybean export sales(471,600 old and 225,800 new) were at the upper end of expectations.  Soymeal sales(389,500 tons) were again extremely good.  Corn sales(1.25 mmt old and 218,100 tons new) were a little better than expected.  Wheat sales(264,400 old and 74,200 new) were a little soft.  
   Malaysian palm oil prices were up for the 2nd day on rising exports. Recent shipping data points to March 1-20 exports to rise.  There’s also some risk premium being built in with the talk about the Pacific slowly moving toward another El Nino event. 
   The final results of Egypt’s wheat tender were a bit of a plus, with 420,000 being purchased from Russia, Ukraine, and France.  US SRW was the low offer, but freight differentials work a little against us. 
   But other wheat business around the world has been masked by the focus on Egypt.  Saudi Arabia recently completed a big purchase.  Algeria is wrapping up one today, with other smaller tenders said to be in the works for other countries. 
   Weather forecasts are a part of the mix.  The longer range outlooks slow the warmth retreating a little to the west.  More important, they point to above normal moisture across much of the country from the Great Plains east, undermining some of the dry weather talk that has been a part of the markets of recent.  Moisture in the S. Plains is critical with the crop coming out of dormancy, soils dry, and crop conditions declining. 
   S. American weather is important as well.  Argentina is expected to be drier to the south, with rain/dry days intermixed in the north.  Temps will be near normal, but turn warmer.  Northern Brazil still has rain in the forecast for the new 2nd crop corn; temps will be near/above normal.
   The Dollar is still weaker in the early trade today after the Fed made the expected move to raise rates.  They indicated more increases are coming, unless something would derail economic activity. The trade generally though the Fed was less hawkish than they expected with talk of 3 rate hikes this year instead of 4. Lower jobless claims and higher housing starts were a little better than expected.

***** Cattle should start the day slightly higher; lean hogs steady. *****  

   Wholesale beef is higher with choice at $221.32. Cash cattle traded higher Wednesday with cash mostly at $128 live and $210 dressed.  Trade was termed moderate at best.  Futures are expected to sustain short term strength with the large cash premium.
   Wholesale pork was steady/lower at $82.18. Cash hog prices should be steady/firm with good margins.  For both hogs and cattle, the moderating weather conditions should work against cash strength.