AgriVisor Morning Marketwatch

Friday, July 07, 2017
   ***Good Morning***

***** Grains were mostly sharply lower in the overnight trade; soybeans are 1-2 lower, corn fractionally lower, and Chi and KC wheat 6-7 lower, but Minn 1-2 higher. *****

   # The battle today may be between end-of-week profit taking versus the bullish implications of short term weather in the western Corn Belt and Great Plains.  Weak crude oil, a generally weaker commodity sector, and a slightly stronger Dollar may weigh into the mix as well. 
   # Short term weather is going to get extreme in the central and northern Plains over the weekend, with many places having daytime highs at 100, if not a little more.  That’s going to be stressful on crops that may have had a drink this week.  Hot temps are expected to occur as far east as central Iowa, impacting crops in the western part of the Corn Belt.  Temps will be milder east, but overall, it should be setting the condition ratings to be lower again Monday, especially for spring wheat. 
   # The longer range outlooks remain much the same.  The 6-10 day keeps the Midwest warm, with dryness mostly confined to the Great Plains.  The 8-14 day is still warm, but the dryness slips southeast into the heart of the Corn Belt.  Longer range outlooks, although still uncertain, tend to suggest dryness will persist in the Midwest, maybe not enough to have a significant drought, but they don’t point to a repeat of last year’s weather.
   # There’s starting to be more talk about the potential corn yield.  So far, we are hearing more discussion of something in the 165-170 range this year.  Our crop condition model yield is just over 170, but it is early. Late in the day, wire services may start releasing their polls for expectations for next week’s USDA reports.  
   # Export sales numbers will be out this morning.  The trade is looking for 300-500,000 tons of wheat, 350-750,000 tons of corn, and 250-650,000 tons of soybeans.  All are combined old/new crop. 
   # Malaysian palm oil finally slipped, but mostly on end-of-week profit taking. Production uncertainty remains, with talk of production not growing as fast as expected. France has also indicated it’s going to restrict the use of palm oil in making biofuels on deforesting concerns.
   # Reports from Argentina indicate the soybean harvest is all but over, with 53% of the corn harvested.  Wet conditions have been hampering activity recently. 
   # The Dollar is holding small gains this morning, with today’s jobs report set to trigger activity going into the weekend. Inflation and employment are being watched closely for clues as to whether the Fed might hike rates one more time this year. 

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

   # Wholesale beef is sharply lower with choice at $220.05. The cash cattle market should continue to have a weak undertone with the sliding wholesale market.  Asking prices are $120-$122, with trading mostly in the $116-$118 range. 
   # Wholesale pork is slightly lower at $103.84. Cash hog prices should be firm today, with packers wanting inventory to fill out the week’s slaughter, including a big Saturday slaughter.  Packer margins remain good. Hog prices are nudging $90 this week.