AgriVisor Morning Marketwatch

Wednesday, July 05, 2017
   ***Good Morning***

***** Grains are called higher to start the day with a wide range of expectations; soybeans are called 5-10 higher, corn 2-5 higher, and wheat 2-10 higher, with Minn still the strongest market. *****

   # Markets resume trading at 8:30 today, but the take from some other selected markets suggest a firm opening.  Paris wheat opened firmer.  Winnipeg canola was higher yesterday, and Malaysian palm oil markets were stronger.  But rain forecasts for the Midwest the next couple of days could cap buying interest, in corn, soybeans in particular.  Weather will be the driver, but there will be corn/soybean grind/crush numbers coming this afternoon.  And the weekly crop ratings were delayed until today.  The usual weekly ethanol output should be delayed until tomorrow. 
   # The current take on the weekly crop ratings is that corn and soybeans could be steady/1 point lower.  Spring wheat could be off another 2-3 points.
   # The 7 day moisture forecasts show reasonably good moisture from Iowa east.  Most of that appears destined to come the next couple of days, but some could come early next week too.  The weekend is looking mostly warm. The Great Plains, especially the N. Plains look to remain mostly dry, although some light rains could occur. The 6-10 and 8-14 day outlooks Tuesday were consistent with Monday’s talking about warm temps for most of the Midwest, with dryness in the central/western parts of the Corn Belt and G. Plains.  The problematic pattern extends up into the southern Canadian Prairies.
   # In general, the Indian monsoon has gotten off to a somewhat average start, but there has been some stifling heat.  The latest forecasts should the moisture pattern becoming more entrenched lifting north.  The latest forecasts for the tropical Pacific suggest the neutral tendency will persist with little chance of an El Nino the rest of 2017.  Europe and the Black Sea area have mixed weather conditions, but aren’t good enough to be considered a negative.  And heat, dryness is expected to return to northern China.  Southern areas have had some heavy rains.  There’s also talk that Australia’s wheat crop will be lower than recent expectations because of ongoing winter drought. 
   # Egypt issued a wheat tender over the holiday, with results to come this morning. 
   # Malaysian palm oil output is not picking up as much as anticipated, which should help shore up prices across the vegoil spectrum. 
   # The Dollar is starting the day a little stronger.  There’s a lot of focus on Fed meetings to be released later today.  The trade will look to them to help sort out inflation and Fed policy. 

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

   # Wholesale beef is lower with choice at $222.89. The cash cattle market should continue to have a weak undertone with the sliding wholesale market.  Asking prices are near $122, but look for the trade to be $118 or less. 
   # Wholesale pork is higher at $104.32. Cash hog prices should be strong today, with packers wanting inventory to fill out the week’s slaughter, including a big Saturday slaughter.  Packer margins remain good. Hog prices could nudge $90.