AgriVisor Morning Marketwatch

Wednesday, June 28, 2017
   ***Good Morning***

 ***** Grains are steady/firm to start the day, with soybeans 1-2 higher, corn steady, Chi and KC wheat 1 higher, and Minn 10-11 higher. *****

   # It was a relatively quiet overnight trade.  With the USDA numbers coming Friday, and an absence of significant news, the trade may be content to get positioned to go through the end of week reports.  Dollar weakness seems to be the biggest thing on the agenda this morning, along with weather.  
   # Not to be lost in the mix of news coming late week, StatsCanada will release their acreage numbers Thursday morning.  Given the problems with our spring wheat crop, their acreage could be a critical element in the evolution of Minn spring wheat futures. Talk in the industry has dropped some estimates for the US spring crop to 340 mln. bu., off about 1/3rd.
   # The weekly energy stocks will come this morning, along with the ethanol output data, offering some news for the trade to work with. 
   # The wheat harvest in Russia and other East European countries is just getting underway.  Early reports imply good yield/quantity.  One analysts is projecting a 70 mmt. Russian wheat crop.  But harvest is slow to start.  By this time last year they had harvested over 1 mmt. 
   # There’s some speculation that the size of the French crop might be declining, especially after the recent heat wave.  The latest estimate was 35.6 mmt., with some talking about it slipping to 34 mmt. 
   # The industry continues to look for EPA’s biofuel mandates for 2018 and 2019 to be announced 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. 
   # Weather is going to warm up heading to the weekend, with temps normal/slightly above normal.  There continues to be a lot of uncertainty about the longer range forecasts, with the 6-10 and 8-14 day US model forecasts pointing to above normal temperatures for the Midwest.  The corn trade is especially sensitive with some tassels starting to show.  From the G Plains west it’s expected to be dry, with wetter weather from the Miss River east.  And some long term indications are leaning toward a warmer end of summer. 
   # The Euro started higher in Europe following yesterday’s surge, but has since moved back close to unchanged.  Comments out of the ECB suggested Draghi’s comments that sparked the rally were misinterpreted.  Growth is occurring, but they believe stimulus is still necessary.  The delay in the vote on the health care proposal helped keep a lid on Dollar buying interest. 

***** Cattle should start the day lower; lean hogs mixed/firm. *****
   # Wholesale beef is sharply lower with choice at $233.91. The cash cattle market is still quiet, with a few trades at $120 yesterday.  Weakness in the wholesale trade and yesterday’s break in futures will keep the complex on the defensive. 
   # Wholesale pork was slightly higher at $102.31. Packer margins remain good thanks to persistent wholesale strength.  Look for hog demand and cash price strength to stall with the short slaughter week coming.