AgriVisor Morning Marketwatch

Monday, January 22, 2018
   ***Good Morning***

***** Grains are slightly higher this morning; soybeans 7-8 higher, corn 1-2 higher, and wheat 3-4 higher. ***** 

   # Much of the focus today in all market sectors is going to be on the US govt. and another vote on a bill to end the shutdown.  The Senate is scheduled to vote at noon. 
   # Weather in Argentina continues to be the primary short term focus.  There will be some light showers to start the week, with a few localized heavy amounts.  After that, this week is said to be mostly dry, with some extreme heat in parts of the country.
   # Export inspections won’t be available through the normal channels this morning, but should be available from FGIS.  Grain inspections continue even though the govt. is technically shut down.  FGIS is the source of that data even though it’s normally distributed through AMS.
   # The slow start to harvest in Brazil is playing a part in the mix as well.  Less than 3% of the Mato Grosso harvest is complete, about ½ normal.  This week’s weather forecast has some rains, but not anything that’s abnormal for this time of year.  The bigger issue may be the slower maturity with the later planting date. 
   # The Brazilian Real has been playing a part in soybean gains as well.  It is higher for the 3rd-4th day in a row, and has consistently been rising since the beginning of the year.  It’s now nearly 4% up on the year. 
   # There’s been talk about Russian grain exports being significantly larger this year, but the story is not something new; it’s just fresh data.  Grain exports are up 36%, with wheat exports up 35% from last year at this time.
   # Parts of Russian wheat areas got some snow over the weekend, so the crop should be insulated if there would be a wave of cold air.  Winter kill talk there should be off the table for now. 
   # Meanwhile, Friday’s CFTC report mostly showed funds were sellers after the USDA report.  The corn position is a record short, with wheat not far from a record position. That has caught them on the wrong side of a market trying to turn up, adding some of the buying the market is currently seeing.  
   # World equity markets mostly shrugged off our shutdown, with many thinking it’s just a short term disruption.  Treasury yields which have fallen some in the past, were higher overnight. The Dollar was a little softer, with many in the forex trade focusing on the Bank of Japan and the European Central Bank this week.  The economic meeting in Davos is mostly being ignored; little generally comes from it. 

***** Cattle should start the day slightly higher; Lean hogs steady/firm. *****  

   # Wholesale beef is slightly lower with choice at $204.86. Cash cattle had a stronger tone to end the week, with a few pens said to have been prices near $125.  Packers are short bought, but with margins being pinched, don’t expect those prices to persist. 
   # Wholesale pork is slightly higher at $81.44. Cash hog prices should be firm with the winter storm disrupting movement to start the week, but that impact shouldn’t be long lasting.