AgriVisor Morning Marketwatch

Monday, May 14, 2018
   ***Good Morning***

***** Grains are mixed in the early trade; soybeans 3-4 higher, corn 1-2 lower, with wheat 4-6 lower. ***** 

   # Wheat still seems to be leading the downward charge, a move that is weighing on corn too.  The 6-10 forecast continues to show above normal precip for the S. Plains; the 8-14 day does as well, but to a less so extent. 
   # Planting progress is the other big item, especially with the wetter forecasts.  Early this morning, the trade seems to be looking for USDA to report corn at 55-60%, soybeans at 30-33% done, and spring wheat at 50%(norm is 75%).  The focus is going to be on the northern Corn Belt/N. Plains, the area where planting has been most delayed, with Minn having the biggest delays; they are a key corn/soy state.
   # There is a lot of discussion about the wet conditions that have cropped up in Argentina the last few weeks.  Quality has been hit with a lot of stories about green beans, with yields dropping on unharvested fields as well. It is said up to 6 mln. hectares are affected, 3 mln. severely. Some loss estimates are as high as 1.5-2.0 mmt, but that’s probably an exaggeration. Something less than 1.0 is probably better, but there’s still 40% to be harvested.
   # The new 6-10 and 8-14 day outlooks are still calling for above normal precip in much of the Corn Belt, but the latter shifts more toward normal. The 6-10 is mostly normal/warm, but Nebraska is cooler.  The 8-14 day is back toward more warmth.  There’s talk May could be the warmest since 2012; interesting in the wake of a record cold April.
   # There is a story circulating this morning about Brazil becoming the #1 producer of soybeans next year.
   # Maybe the biggest story this week is Vice Premier Liu He coming to Washington this week for more discussions on the trade issues.  There appears to be some softening on the US side, along with some talk last week about Chinses shifts, suggesting progress is being made. There is some angst in the U.S. to start the week because of Trump comments about getting ATE need chips.
   # Brazilian producers are said to be good sellers of soybeans and corn; Argentine producers not so much.  The collapse of the Arg. Peso has stifled selling interest in Arg., along with this year’s weather that has severely cut yields.  Peso prices are at new record highs, but because the Peso has dropped sharply in recent weeks, producers are mostly sitting on the sideline. 
   # Funds positions; corn 237,995 long, +17,121; soybeans 110,545 long, -38,806; Chi wheat 25,756 short, -21,669. 
   # The Dollar was weak in the early trade, the 4th day it has slipped lower in the wake of its recent surge. The budget deficit and looming corporate tax cuts are causing some hesitancy in holding long Dollar positions, although the interest differentials will be supportive.  Many are watching Argentina to gauge their actions to stem the recent collapse in the Peso. 

***** Cattle should start the day slightly lower; Lean hogs mixed/higher. *****  

   # Wholesale beef is slightly lower with choice at $230.97. Cash cattle prices could slip this week with some animals said to have been carried over from last week, along with a slightly rise in animals that should become market ready this week. are expected to rebound after the hard break over the last 1-2 weeks.  Offers are said to be near $120, implying a cash trade at $115-$118. 
   # Wholesale pork is higher at $73.47. Cash hog prices are expected to be as much as $1 higher in the early trade.  Hog numbers should tighten faster than in recent weeks.  Packers indicate they are starting to see numbers tighten slightly, suggesting the seasonal decline in supply is about to begin.  If cash is firm today, the trade expects early summer hog futures to firm.