AgriVisor Morning Marketwatch

Monday, July 03, 2017
   ***Good Morning***

***** Grains are sharply higher to start the day, with soybeans 21 higher, corn 7 higher, Chi wheat 8-11 higher, KC wheat 12-14 higher, and Minn 33 higher. *****

   # Weather is dominating the mix.  As one forecaster put it, it’s a very volatile mix as the models seem to be changing with each model run.  And forecasters generally are not agreeing with each other very well, depending on the model they believe is producing the best forecasts.  Having said that, moisture totals of recent(on a widespread basis, don’t seem to be living up to forecasts.  The Dakotas continue to be the focus, and with 10% of the corn and 14% of the soybean production that’s notable.  A 10% cut in their output cuts 140 mln. bu. and 60 mln. bu. of  corn and soybeans respectively.
   # The USDA will release the weekly export inspections this morning, but the weekly crop condition numbers won’t be released until Wednesday; likely because it’s a late day report.
   # Friday’s USDA reports still lurk in the background.  There wasn’t anything significantly negative in them to divert the focus away from the weather.  The corn numbers were slightly negative, soybeans slightly positive, and wheat a mix. But the lower spring wheat plantings and smaller Canadian plantings did not go unnoticed.  The chase for protein in the wheat complex persists. 
   # Friday’s new 30-day weather outlook showed persistent problems in the N. Plains, with heat, dryness not expected to go away.  The Great Plains will stay warm, but the eastern Corn Belt will be normal.  And other than the N. Plains, moisture is expected to be normal or above, but mostly normal. 
   # The new 6-10 and 8-14 outlooks tended to intensify weather problems with much of the Midwest covered by above normal temps and below normal moisture.  We caution you in adhering to these as they are computer generated over the weekend.  This afternoon’s should offer better guidance. 
   # Parts of France remain dry, while Germany got hit with some heavy rains, which could diminish their wheat output.  Ukraine’s weather is still somewhat troublesome, and Australia hasn’t seen any significant relief.
   # Adding into the mix is the fact the big funds increased their short positions in corn and soybeans as of last Tuesday.  That leaves in place more potential short covering.  They were moderately long wheat. 
   # The Min of Agr reported 66% of the Arg corn crop had been harvested. 57% of the Arg. wheat has been planted, about normal, but seeing some delays from rain. AgRural reported 16% of the 2nd crop corn had been harvested in Brazil, slightly ahead of the 12% 4 yr. avg.
   # Palm oil futures rose 1.8% in Malaysia, but were following the lead of markets in Chi. And Dalian China. 
   # The industry continues to wait for EPA’s biofuel mandates for 2018 and 2019 to be announced, hopefully sometime after the holiday.
   # The Dollar extended their recent strength, but in a quiet trade.  Talk about tightening monetary policy around the world is expected to cap short term strength.  The Yen was the strongest of the major foreign currencies because of weekend election results.

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

   # Wholesale beef is lower with choice at $224.73. The cash cattle market will be ill defined today, but expectations will be negative until wholesale prices find some footing. 
   # Wholesale pork was slightly higher at $102.92. Cash hog prices should be strong today, and will remain that way midweek with packers wanting to make up for tomorrow’s lost time.  They are still making good money.