AgriVisor Morning Marketwatch

Tuesday, June 27, 2017
   ***Good Morning***

***** Grains are higher to start the day, with Minn wheat 7 higher; soybeans 7 higher, corn 2 higher, with Chi and KC 2-3 higher. *****

   # The big story to start the day, and there isn’t much there of note, lies in the weekly condition ratings.  Both  soybean and spring wheat numbers were 1 point lower, soybeans at 66% g/e and spring wheat at 40%.  The trade had expected steady/better on both.  The corn rating was steady at 67%; the trade had expected a 1 point increase.
   # Corn silking is 4%, a little behind last year and average, but it’s early.  But the recent cold and replants should keep it a little behind this year.  Ironically, soybean blooming, 9%, is a little ahead.  Winter wheat harvest, 41%, was a little behind.  Kansas is 48% done; Illinois is way ahead at 78% complete. 
   # Meanwhile, other than persistent dry weather stress in the N. Plains, and heavy water pressure in parts of the eastern Corn Belt, weather is not seen as being stressful.  Temps will warm into the weekend, but not to extreme highs.  Most will view the warm up as being good for the crops. Still, the subnormal 30-day precip totals across many parts of the Corn Belt are not going unnoticed. 
   # Long range forecasts generally say warmth is going to stay with us, although cool temps still dominate far northern areas on the 6-10.  Precip is expected to be drier in the Plains west, with the eastern/southern Corn Belt expected to see above normal precip.  Forecasters are still not looking for any extended heat, although there is some risk in later July.
   # Wheat harvest is said to be just starting in France.  Early reports show variable wheat yields, but the quality seems to be looking good. In Spain, Ukraine, and even parts of France, weather has been, and continues to be less than ideal.  Even the warm, dry conditions are persisting in China. 
   # The EPA is expected to unveil their biofuel mandates for 2018 and 2019 this week.  Given that ethanol has been lurking around the long term target, the key element in these new numbers could have more implications for biodiesel/soyoil. 
   # Argentine producers are thought to have only priced 12 mmt. of this year’s soybean harvest, 21% of the crop.  Over the past 5 years, they have priced 33% by now.  Even sales in Brazil are lagging with 78% priced compared to 91% last year.  New crop sales are thought to only be 4% done compared to 21% a year ago.  The slow pace of sales is also slowing input purchases. 
   # The Euro moved higher against the Dollar this morning after ECB President Draghi gave an upbeat assessment of the EU economy.  He was even upbeat on the return of inflation.  Traders are waiting to hear Fed President Yellen’s comments at a speech later today. 

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

   # Wholesale beef is slightly lower with choice at $238.57. The cash cattle market last week lower, but is ill defined to start this week, but could stabilize in the wake of the surge in futures.  Nevertheless, the negative COF may keep a lid on gains. 
   # Wholesale pork was steady/higher at $101.35. Packer margins remain good thanks to persistent wholesale strength.  Cash should start the day steady. The USDA will issue a quarterly hog report Thursday.