AgriVisor Morning Marketwatch

Friday, September 22, 2017

***Good Morning***

***** Grains were slightly higher in the overnight trade; soybeans are 6-7 higher, corn 1-2 higher, with wheat 2-4 higher. *****

   # There are a myriad of small fundamental factors helping bring buying into the mix, along with technical features giving the markets a small boost.  It will be interesting to see how the trade finishes out the day, with a good weather helping harvest this weekend.
   # Weather may slow harvest activity in the western Corn Belt early next week, with the eastern Corn Belt looking more open. The longer range outlooks have normal/cool temps, but much of the moisture seems to be focused on the S. Plains.  That will help the wheat being planted.  
   # The yield reports the trade is seeing seem to be generally better than expected, albeit mostly below last year.  That’s more true for soybeans than it is corn, with producers thought to be holding off on corn somewhat to allow it to dry in the field. 
   # The soybean trade is still talking about yesterday’s unexpectedly large weekly sales number.  The pessimism about the slow early sales pace seems to have faded with that number.
   # The corn trade is wanting to talk up the possibility of China importing some corn to feed their ethanol industry.  But with stocks still big, and their new harvest getting underway, there isn’t likely to be any significant import business anytime soon.  Their futures were slightly higher overnight, but that may be tied to talk of producers holding back on sales at harvest, anticipating higher prices later.
   # Issues in Australia are the most talked about feature in wheat, along with the wet issues in Argentina.  Australia is expected to remain mostly dry over the next couple of weeks. A small improvement in spring wheat exports is softening the negative price attitude in the Minn market, helping lift an impediment in Chi and KC. 
   # Yesterday, funds were thought to have bought 1000 lots of soybeans, 3500 lots of wheat, but were about even on corn.
   # On the economic front, the new unemployment claims were a little less than expected.  The Philly Fed Manufacturing index was a little stronger.  Both fit in the framework allowing the Fed to start selling off their book of bonds, and maybe raise rates in December.  Financial markets though are still trying to adjust to the coming changes in Fed policy. There are hints the ECB might join what is being called “the great unwinding” too; that and other issues are weakening the Dollar.

***** Cattle should start the day steady/weak; lean hogs slightly lower. ***** 
   # Wholesale beef is lower with choice at $191.51. The cash cattle trade has been relatively quiet so far this week, but should pick up ahead of this afternoon’s COF report.  Weakness in beef and the softer futures might keep prices weak today.
   # Wholesale pork is sharply lower at $73.04. Cash hog prices are likely to trade lower with the ongoing decline in wholesale prices. Packers are pushing chain speed aggressively, supporting hog demand for slaughter, but that can’t counter the supply nor the weak pork market.