AgriVisor Morning Marketwatch

Monday, August 07, 2017
   ***Good Morning***

***** Grains were mostly higher in the overnight trade; soybeans are 6-7 higher, corn 3-4 higher, with wheat mostly 3-4 higher. ***** 

   The most important ingredient giving the grains a lift to start the week was the failure of weekend rains.  Iowa amounts were especially disappointing, with good Illinois rains mostly confined to the southern 1/3rd of the state.  Des Moines Iowa is having the 8th driest summer on record so far.
   Weather forecasts are still much the same.  The 6-10 and 8-14 day outlooks still changed much.  Below normal temps remain anchored over the Midwest, but the intensity seems to be moderating.  Below normal rains are still in the N. Plains, but on the 8-14 day outlook below normal rains seem to shift to the western part of the north/central Plains.  Above normal precip seems to remain from the S. Plains east across the South. 
   # The bigger talk for the week is going to focus on Thursday’s USDA numbers.  The Reuters poll puts the average yields for the trade at 166.2 bu. for corn and 47.5 for soybeans.  Bloomberg’s poll was just slightly less.  The wheat output will be revised down again, with the trade looking for the total crop to be near 1.711 bln. bu. and the spring crop near 393 mln. bu. 
   Smaller crops bring smaller stocks, with the trade looking for” 2003 mln. bu. of corn, 424 mln. soybeans, and 903 mln. wheat.
   The early talk about the crop ratings today seem to center on soybeans steady-up 1 and corn steady-down 1.
   There is some talk about Friday’s Monthly Census export numbers for soybeans.  The 66 mln. bu. June exports were higher than the weekly inspections or shipment numbers implied, further indicating the USDA will raise old-crop exports on this week’s s/d report.  Some think the increase could be as much as 50 mln. bu. 
   Wheat harvest is said to be 31% complete in Russia.  With the harvest push this year, exports are flowing into the export pipeline.  New crop exports are said to be up 20% on the year so far at 2.6 mmt. The head of Ag. Ministry is expecting 38 mmt of exports. 
   # Weather is bringing continual downgrades to the Aust. Wheat potential this year.  The National Bank cut their estimate to 22.7 mmt., matching others.  There are some voicing the possibility of a crop under 20 mmt. 
   France lifted the size of their wheat crop slightly; now at 36.78 mmt., 24% higher than last year.  Harvest is all but over. The rapeseed crop was raised slightly too, now at 5.22 mmt. 
   Chinese crushers are said to have resold 8 soybean cargoes because of port congestion and soft crush margins.  There’s also some talk about inability to get letters of credit to be able to offload, which would imply tightening credit markets in China may be at play too. 
   The Dollar is slightly lower in the early trade today, still being supported by Friday’s upbeat jobs number.  Turmoil in Washington continues to undermine the Dollar.  The trade is looking ahead to inflation numbers coming later in the week, especially after the higher wage increases noted in Friday’s employment report.   

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

   Wholesale beef is slightly lower with choice at $203.61. The cash cattle trade will be characteristically quiet to start the week, with offers thought to be at $120-$121.  Still, the premium cash has to futures and supply of market ready animals will be a downward drag.
   # Wholesale pork is lower at $95.77. Cash hog prices are expected to remain defensive with weakening wholesale prices and the slight rise in numbers.  Hog futures will be supported by the discount to cash.