AgriVisor Morning Marketwatch

Thursday, June 29, 2017
   ***Good Morning***

***** Grains are slightly higher to start the day, with soybeans 6 higher, corn 3 higher, Chi and KC wheat 10-11 higher, and Minn 35 higher. *****

   # Canadian acreage and export sales are on the trade’s docket today.  Other than that, it will mostly be positioning for tomorrow’s USDA numbers.  Ongoing Dollar weakness might be mildly supportive.  
   # Corn export sales, 384,600 tons, were disappointing. Soybean sales, 314,400 tons were at the bottom of expectations.  Wheat sales, 492,100 tons, were at the top of the range.  Soymeal sales, 59,400 tons, were disappointing as well.  Still, it has become notable for export sales to be soft the week ahead of key USDA reports; likely tied to pervasive bearishness. 
   # Stats Canada projected a wheat planting number of 22.4 mln. acres, with rapeseed at 22.8 mln.  Breakdowns weren’t available yet. The trade was looking for the Canadian wheat acreage to be 22.7 mln. acres, down slightly from their April number.  5.15 mln. is expected to be durum and 16.7 other spring, with a smattering of some winter wheat, mostly Ontario. Rapeseed plantings are expected to be 22.2 mln. acres.
   # Weather remains a key element in the mix.  Other than temps returning to more normal levels, there isn’t much threatening for the Corn Belt.  Still, the longer range outlooks stay dry for the G. Plains and areas west. The overall temp forecast for the Midwest remains a little warm, especially in western areas.  There’s still a mix of ideas about how July will turn out as a whole.  Tomorrow morning there will be a new monthly forecast. 
   # Along with the USDA planting/stocks numbers tomorrow, the Int Grains Council will issue their new monthly estimates on the world grain fundamental situation. 
   # There is talk that the spring wheat rally may be getting overdone in the short term, but the July 12 production number may be a more important market moving element than the acreage numbers coming today and tomorrow.  Minn July did cross an important resistance at $7.25 this morning, so it may be important to watch that during the day.  Prices are short term overbought.
   # The industry continues to look for EPA’s biofuel mandates for 2018 and 2019 to be announced at any time.  The key element in these new numbers could have more implications for biodiesel/soyoil. 
   # One of the satellite crop projection companies, Tellus Labs. projected a 166.2 bu. corn yield and a 49.5 bu. soybean yield.  We’ve seen others from Lanworth, and they were lower.  But like the crop ratings, early season estimates are still too unproven and may be unreliable. 
   # The Dollar pared early weakness after the new GDP numbers came in a little better than expected.  First qtr. GDP came in up 1.4% compared to the prior estimate of 1.2%.  Weekly jobless claims jumped 2000; the trade expected them to drop 2000. 

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

   # Wholesale beef is sharply lower with choice at $229.43. The cash cattle market has been soft so far this week, with trading $3-$5 below last week.  Until wholesale prices stabilize, this market could remain soft. 
   # Wholesale pork was higher at $103.54. 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.  Hog prices were steady/weak yesterday.  At 2 pm, the USDA will release the quarterly hog report. The trade is looking for inventories to be up 3.3%.