AgriVisor Morning Marketwatch

Wednesday, August 16, 2017
   ***Good Morning***

***** Grains were mostly steady/firm in the overnight trade; soybeans are 2 higher, corn fractionally higher, with wheat mostly 1-2 higher, but Minn is 14-15 higher. ***** 

   # Mostly, today is going to be about weather.  There isn’t a lot of other significant news.  Mid-morning, the EIA will release the weekly crude oil/ethanol numbers, but the  latter have not had much impact for weeks.  The grind is expected to be slightly higher. And in financial circles, everyone seems to be focused on the release of the July Fed Reserve minutes.
   # The short range weather maps still have rains across the Midwest the next couple of days, although the warmer temps will deplete amounts faster than they would have a week or two ago.  There was good rains in Nebraska/Kansas the last 24 hrs.  Radar amounts are big, but these are typically a huge exaggeration.  
   # The longer range outlooks show a warm, wet regime across much of the Midwest, turning into a warm-normal temp, and more normal moisture in the 8-14 day outlook.  There is growing talk about a cold wave the middle of Sept, but it’s much too soon to say it might have frost risk. There will be new monthly weather outlooks coming tomorrow. 
   # There’s a steady stream of talk about the potential viable ear size for corn, especially with USDA’s generous implied ear size on last week’s report.  There will be a lot of focus on next week’s Pro Farmer tour to check their findings against last year and the last few years to see if their findings support USDA, or not.
   # Yesterday’s NOPA crush for July, 144.7 mln. bu., was slightly better than expected.  Last month’s numbers weren’t revised, continuing the uncertainty about the discrepancy between NOPA and NASS that arose with the June crush estimates.
   # The industry is watching Egypt and Tunisia closely regarding wheat tenders in the wake of the steep fall in wheat prices over the last week. Russian prices have gotten cheaper with their big harvest, but U.S. offers could be competitive.  
   # Argentine corn area is expected to grow 5-10% again.  Much of this is tied to the slowness of reduction in the soybean export tax reduction.  Also the stimulus to increase corn plantings was set in motion with the change in their export policy that set in motion a move to rebalance their rotations that had become heavily biased to soybeans.  Look for this shift to generally remain a few years.  Corn exports are slated to pick up, but soybean shipments remain subdued waiting for export tax reductions.
   # Forex traders are hoping to get some insight into Fed intentions regarding the unwinding of the bonds on their balance sheet from the July minutes. The Euro area GDP grew 0.6% in the 2nd qtr, in line with expectations.  U.K. unemployment was down slightly to 4.4%.  Wages grew 2.1%. 

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

   # Wholesale beef is near steady with choice at $198.95. The cash cattle trade continues to have a negative undertone, with some cash trading as low as $110 yesterday.  The premium cash had to futures has now fully evaporated, putting some leadership back into futures.  
   # Wholesale pork is steady/lower at $93.85. Cash hog prices are expected to be steady/weak with packers continuing to see plenty of hogs to choose from.