AgriVisor Morning Marketwatch

Friday, June 30, 2017
   ***Good Morning***

***** Grains are higher to start the day, with soybeans 3-4 higher, corn 4-5 higher, Chi and KC wheat 10-12 higher, and Minn 14-15 higher. *****

   # Today is going to be about the USDA stocks/acreage numbers and the weather. USDA numbers come at 11 am central time. Given the rally in spring wheat prices, it will receive especially close scrutiny.
   # The trade is looking for these acreages; spring wheat – 11.2 mln., corn – 89.9 mln., soybeans – 89.75 mln., cotton – 12.2 mln., and rice – 2.6 mln. 
   # The June 1 grain stocks expectations are; corn – 5123 mln. bu., soybeans – 983 mln., and wheat – 1137 mln. bu.  
   # In the wake of yesterday’s Canadian acreage numbers, officials in Saskatchewan downgraded the condition of the spring crop in that province 5 points to 70% good/excellent.  
   # After a period of relatively benign weather, more stressful conditions are slated to return, to the Great Plains in particular.  Some forecasters see 100 degree heat in the N. Plains over the weekend. 
   # The new longer range forecasts don’t promise much, if any, relief for the Great Plains west.  Temps are expected to remain above normal for much of the US, but especially so for the western US.  Precip forecasts are below normal for the central/northern Plains to the west. From the central Corn Belt east, precip could be a little above normal.  
   # The Int Grains Council will issue their new monthly estimates on the world grain fundamental situation later today too.
   # Talk about a short term end to the spring wheat rally stopped after yesterday’s surge, to be replaced by discussion about how high prices might go before the rally does stall.  Even though funds have mostly liquidated huge shorts in Chi and KC, the shift in their positions is still helping fuel the gains in Chi. and KC.
   # 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.  It’s now looking like they may not come until after the holiday.
   # The Dollar regained some ground early Friday, but the strength looked more like position squaring ahead of the US holiday.  Talk that monetary policy may strengthen in Europe is keeping the Dollar on the defensive.  

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

   # Wholesale beef is lower with choice at $226.55. The cash cattle market has remain weak, with trading $3-$5 below last week.  Until wholesale prices stabilize, this market could remain soft. 
   # Wholesale pork was lower at $102.32. Packer margins remain good thanks to persistent wholesale strength, but are narrowing in with the smaller seasonal supply of hogs.  Cash hog prices were higher yesterday.  Look for hog demand and cash price strength should stall with the short slaughter week ahead.  The USDA quarterly hog report contained numbers that were only slightly above expectations; leaving a neutral/slightly negative environment.