Agrivisor Morning Marketwatch

Thursday, September 21, 2017
***Good Morning***

***** Grains were slightly lower in the overnight trade; soybeans are 4 lower, corn fractionally lower, with wheat mostly 1-2 lower. ***** 

   # Harvest activity seems to be the big driver of the overnight markets, with more of the harvest activity focused on soybeans than on corn. Still, yield reports are hard to come by with harvest just starting.  But, the ones we hear seem to be less than last year.  
   # Export sales will dominate the activity today.  Soybean sales, 2.3 mmt., were well above expectations.  Corn sales, 526,900 tons were less than expected.  Wheat sales, 307,200 were at the low end of expectations. Soybean product sales were mediocre.
   # Brazilian weather forecasts still seem to point to rain starting the end of next week; if large enough, they will allow planting to begin.  But as one analyst put it, there will be no soybean harvest in January this year. 
   # Ukrainian planting is going ok, but rain is needed to get crops off to a good start.  27% of the wheat has been sown, with 4% of the barley.
   # There does seem to be more talk about export demand from Asia shifting to the US because of the ongoing problems with the Australian crop.  Some rain is in the forecast for the southern part of Western Aust, but it’s dryness in the southeast and the scattered frost that are a bigger problem.  At the same time, Argentine’s wet problem continues, which could dictate some Brazilian imports from the U.S. again later this year.
   # The Dollar did ease off its rally after yesterday’s Fed commentary, but the overnight market was still building in the implications of the stronger currency. The trade is keeping a close eye on the Brazilian Real, Argentine Peso, and Russian Rouble. 
   # The Dollar’s surge late yesterday came with the reading of the Fed thoughts as their latest meeting wrapped up.  They are going to start liquidating the book of bonds they had built during Quantitative Easing.  They also hinted they might raise rates as soon as December. Interest rates are said to be pricing in a 70% chance of another small tightening in December.  There are also hints the ECB might join what is being called “the great unwinding.”

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

   # Wholesale beef is steady with choice at $192.04. Cattle prices could firm with the jump in futures.  Packers are expected to bid $104, but feedlots are thought to be offering cattle as high as $110, which would help insure a higher trade as the week ends.  
   # Wholesale pork is steady at $76.323. Cash hog prices are remain steady/weak behind the persistent weak wholesale market But, packers are pushing chain speed aggressively, supporting hog demand for slaughter, which could stabilize prices today.  Buying for Nat. Pork Month in Oct. could still give the complex a short term lift.