AgriVisor Morning Marketwatch

Tuesday, October 31, 2017
   ***Good Morning***

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

   # Like the last few days, there is not a lot of significant news for the market to work with other than the crop progress data. 
   # Yesterday’s crop progress numbers imply some minor problems may still lie ahead for the corn market.  The 54% corn harvest number was close to expectation, but the harvest in western states is only about 40% complete, well behind the normal pace.  At the same time, weather issues are starting to have an impact in some locations, especially the high winds.  Yield reports in some places are already more variable with the summer weather issues.  The soybean harvest is 83% complete, about normal for this time.  Much of the crop left is in the Midsouth and Southeast.
   # Winter wheat planting is 84% done, just slightly behind normal.  But, the first condition rating, 52% good/excellent, was lower than expected, and below average.  Last year, the crop was 58% good/excellent.
   # The 6-10 day outlook is on the wet side, but the 8-14 day turns normal to dry in most places.  Cold weather is expected in the N. Plains and northwestern parts of the Corn Belt, with normal/warm south and east of that.  Still, it’s somewhat troublesome in the area where corn harvest is most delayed.
   # Russian has harvested a total of 135.1 mmt. of grain, well above last year’s 118.9 mmt output.  The wheat output is 87.8 mmt. compared to 75.8 mmt. last year.  Barley output is 211.5 mmt., slightly higher than last year’s 19 mmt.  Winter crop sowing is complete on 16.6 mln. hectares, about the same as last year, but private analysts indicated the pace is starting to lag.
   # Brazilian soybean planting is 30% complete, with some states in the north still well behind normal.  Rains are starting to encroach on those northern locations, but still look a little inconsistent, scattered.  Meanwhile, margins appear to be tight, with the delays in the north making them potentially a little tighter. 
   # Wet weather problems continue to erode the quantity and quality of the Arg. wheat crop.  The output slippage continues to cut export expectations, now at 10.8 mmt, down 2.2 from last year.  There are worries that will slip further yet, especially if quality becomes an issue.
   # Low wheat prices are causing some uncertainty about the size of plantings this year, not only in the U.S., but around the world as well.  Analysts are on both sides of expectations for US winter sowings, but neither is expecting a major shift from last year’s record low acreage. 
   # The low protein in the US soy crop is garnering some attention, but no one seems extremely alarmed.  The fear has lowered the price of US soybeans relative to those from S. America.  The Nov. 15 NOPA crush report will be the first indication of protein levels other than the anecdotal talk. 
   # China’s corn inventory is getting some discussion again, with some saying up to 70% is unusable.  Truthfully, no one knows what to believe.
   # The Dollar is a little firmer in the early trade, rebounding from yesterday’s slippage due to political concerns.  Primarily, traders are playing a cautious hand ahead of the release of Wednesday’s Fed statement and the coming announcement of Trump’s pick for the Fed Reserve chairman.

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

   # Wholesale beef is slightly lower with choice at $203.02. Strong wholesale prices are guiding the cash and futures markets higher.  Forward beef sales are said to be the good at the moment.  Seasonal concerns that arise in Nov. may soon temporarily cap gains. 
   # Wholesale pork is higher at $78.57. Cash hog prices are expected to be steady/firm, but higher wholesale prices are expected to abate, especially with values significantly higher than last year.  Seasonals are negative for the pork complex.