AgriVisor Morning Marketwatch

Wednesday, October 11, 2017
   ***Good Morning***

***** Grains were mixed/weak in the overnight trade; soybeans are fractionally higher, corn 1 ½ lower, with wheat 2 lower. ***** 

   # Mostly, the trade is talking about yesterday’s CONAB numbers and tomorrow’s USDA numbers.  The weekly condition rating on corn got some attention, but was mostly ignored.  The harvest progress numbers were a more significant item.  
   # Both soybean and corn harvest were a little less than some expected to see.  Corn harvest was 22% complete, with soybean harvest 36% done.  Both were behind normal for this date, but the lags were most pronounced in the western Corn Belt.  Winter wheat is 48% planted and 25% emerged, behind normal, with the lags most notable in the S. Plains.
   # Depends on who you poll.  Reuters puts the yield estimates for corn and soybeans at 170.1 bu. and 50 bu.  Corn is up 0.2 from last month with soybeans up 0.1 bu.  The soybean number shows an acreage increase of about 250,000.  It could be larger than that.  The ending stocks are expected to be near 2.289 bln. and 447 mln. for corn and soybeans.
   # Bloomberg’s poll keeps the soybean yield unchanged at 49.9 bu., with the corn yield dropping 0.1 bu. to 169.8 bu.  Bloomberg’s poll also showed a slightly larger soybean acreage increase than Reuters.
   # The trade was talking mostly about the drop in the first crop corn plantings on the initial CONAB new crop estimate.  The lower soybean number stressed the need for a good growing season. On their first estimate, CONAB projected a 106-108.3 mmt. soybean crop and a 92.2-93.6 mmt. corn crop.  The soybean number was 1.7 mmt. less than expected, with the corn about as expected. Generally, yields aren’t expected to match last year’s record on these initial forecasts.
   # In one of Argentina’s primary states, corn planting is expected to match soybeans after years of primarily soybeans.  The regulatory/tax structures have shifted the balance toward grain plantings the last couple of years.  
   # Malaysian palm oil prices declined on news that stocks had risen to their highest level in 19 months, not over 2.0 mmt.
   # The weekly ethanol output will be out later this morning.  The trade will be looking to see if there’s follow-up from last weeks’ possible seasonal turn higher. 
   # Rain will slow harvest again this week, with this system somewhat wet.  The new long range outlooks are drier again, with the 6-10 day outlook mostly warm, dry.  The 8-10 brings some moisture back into the eastern part of the Corn Belt. 
   # The weather outlook across the center/west area of Brazil continues to be on the dry side, a pattern that will continue to hinder soybean planting.  We’ve seen one outlook putting off significant rain until the beginning of November.  
   # The Dollar is still slipping lower, with doubts about an overhaul to our tax system starting to creep into the mix.  Fed notes from their latest meeting will be released later in the day. 

***** Cattle should start the day slightly higher; lean hogs mixed/weak. *****  

   # Wholesale beef is lower with choice at $197.40. Futures strength this week is expected to elevate feedlot offers, bringing firmer cash prices with them when animals do trade. 
   # Wholesale pork is steady/firm at $73.71. Cash hog prices are expected to be steady/firm.  Good packer margins are supportive, but the harvest stall could work against higher cash bids the next couple of days.