AgriVisor Morning Marketwatch

Wednesday, May 24, 2017
   ***Good Morning***

***** Grains are mostly fractionally mixed to start the day; soybeans and wheat are fractionally higher, corn 1 1/2-2 higher. *****

   # The small changes noted in the overnight trade belies the lack of fresh news for the industry to work with.  Even financial marker changes are very small.  
   # There’s probably more talk in the ag markets this morning about Pres. Trump’s proposed budget cuts than about market moving news.  The new budget proposed $46.5 bln. in cuts to ag spending over the next 10 years. 
   # Weather is probably the biggest news being discussed, with the southern and eastern parts of the Corn Belt expected to stay wet into next week.  Meanwhile, temps are cool in the Great Plains, with some scattered frost reports in the N. Plains. 
   # But it’s important to watch how the longer range pattern develops.  Some forecasters are already starting to notice the potential development of a ridge over the mid-section of the country in middle/late June.  
   # There aren’t any huge issues in the world weather mix today.  The dry areas of northern China have received some rain of recent, although there isn’t reason to think there’s been a pattern shift yet.  Recent rains assure a good 2nd crop corn in northern Brazil, but that system could be the last major event.  Parts of Argentina are still confronting flooding issues, with wet weather impeding planting of winter wheat. 
   # The political issues in Brazil continue to be a part of the mix as well, but have receded to the background.  There’s an ongoing buzz about the possibility the Argentine Peso will continue to decline in the short term, with many having 16 to 1 as a target. That will make the newly harvested Argentine crops more competitive in the world markets. 
   # At 9:30 central time, the EIA will release the weekly energy/ethanol data. 
   # Financial and forex markets are mostly quiet, waiting on the release of the latest set of Fed Reserve notes coming later today.  The trade is seeking to see if the Fed is still on track for another rate hike when they meet in June. The odds of a Fed hike are said to be 77%. 

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

   # Wholesale beef is lower with choice at $219.22. Cash cattle trade hasn’t developed this week, but it’s expected to be slightly lower again this week, with next week’s short slaughter week adding to the defensive stance from packers.  There’s still a lot of buzz about last week’s sharply lower steer weight. 
   # Wholesale pork was moderately higher at $90.30. Packer margins are good which should support cash hog prices, but packer buying interest will be subdued by next week’s short slaughter week. Pork exports are holding strong, helping support cash.