AgriVisor Morning Marketwatch

Tuesday, September 19, 2017
***Good Morning***

***** Grains were narrowly mixed in the overnight trade; soybeans are fractionally lower, corn fractionally higher, with wheat mostly 1-2 higher. ***** 

   # Today is mostly about weather, last night’s new weekly crop ratings, and the implications of the outcome of this week’s Fed Reserve meeting.
   # Yesterday’s new crop ratings left corn the same at 61% g/e.  34% of the crop is mature, with 7% now harvested.  Ill/Ind are 5% harvested, Iowa 1%, and Neb 2%, all a little behind the avg. starting pace.
   # For soybeans, the g/e rating dropped 1 point to 59%, Ill maybe having the biggest decline, 4 points.  41% of the crop is dropping leaves, with 4% harvested.  Key Corn Belt states are mostly 1-2% harvested, with Neb. at 3%.
   # Winter wheat is 13% planted, mostly in the Plains states.  
   # This week’s weather will heat up across the Corn Belt, but the longer range outlooks indicate warm temps will deteriorate, replaced by normal/cool air.  Moisture will increase, starting in the western Corn Belt. 
   # ABARE cut  the Australian wheat export forecast 2.7 mmt. to 18.15 mmt.  Maybe more important is what lies ahead, as they are still working with a crop size of 21.6 mmt. Ongoing drought problems and more weekend frost have some thinking it could fall under 20 mmt. this year, but talk may be starting to border on the extreme. 
   # Attention is turning to Brazil given that dryness is slowing/stopping early planting.  But, the rainy season doesn’t normally start until October.  Rising La Nina probabilities imply dryness in southern Brazil/northern Arg/Paraguay/Uruguay. Persistent wetness in parts of Argentina is mostly important to their potential wheat output, as well as various livestock operations. This week’s rains aren’t expected to be a big issue.
   # There’s a lot of focus in Arg. on the exchange rate.  Producers are waiting on the Dollar to rise vs. the Peso, but neither the govt. nor the banking industry want that, leading some to think the Dollar may not rise much, if at all. 
   # Egypt has a wheat tender out, with results coming this morning. The number of offers are expected to be down because of the restrictions/problems they are having with poppy seeds.  Russia/Ukraine will likely get the business.
   # Strength with the Russian Rouble is limiting the competitiveness of Russian wheat in the world slightly.  Their farmers are said to be slow sellers at the moment. 
   # The Fed Reserve meeting today/tomorrow is dominating the financial/forex markets.  They aren’t expected to raise rates, but the industry is looking for their plans to start unloading the large book of bonds they acquire during their “Quantitative Easing.” 

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

   # Wholesale beef is higher with choice at $192.62. The prevailing thought is that cash cattle should be steady, and maybe slightly higher, when trading does become active late week. Last week was mostly $103-$106.  
   # Wholesale pork is slightly higher at $78.09. Cash hog prices are expected to be steady/lower even though packers are pushing chain speed aggressively, supporting hog demand for slaughter.