AgriVisor Morning Marketwatch

Tuesday, May 15, 2018
   ***Good Morning***

***** Grains are mixed/slightly higher the early trade; soybeans fractionally lower, corn 2 higher, with wheat steady-2 higher. ***** 

   # More than anything, the grains seem to be getting a small lift from optimism heading into this week’s meetings between Chinese and US officials regarding trade between the 2 countries. The optimism seems to be coming from comments on officials on both sides.
   # Planting progress was generally better than the trade expected, spring wheat in particular. 58% of the spring crop has been sown; the trade was looking for 52%. There is some talk the calendar is running out of spring wheat in some places this week, dictating some shifts. 
   # Soybean planting was 35% done; the trade was expecting 30%. Corn was 62% planted; the trade expected 59%.  The delays are still relatively extreme in the northern Corn Belt/Northern Plains states. 
   # The heavier rain probabilities in the new long range outlooks have shifted south some, hinting better conditions for planting in the northern areas. The N. Plains will be drier, but much of the rest of the Corn Belt is expected to be wetter than normal. The S Plains will be wetter than normal which is good for the HRW crop. QPF maps show rains in N. Plains midweek, moving across the Corn Belt into early next week.
   # There is still scattered talk about long term drought possibilities, with the S. Plains drought lingering, and above normal temps remaining in that region, along with the warmth the Corn Belt has had in May.
   # NOPA monthly crush will be out today. The trade is looking for an April crush of 160.96 mln. bu.
   # Brazil’s soy harvest is essentially complete with some putting it at 98%. Brazilian producers are said to have been good sellers with 64% priced, compared to 52% last year and 62% on average.
   # Scattered showers will occur across far southern Brazil into the weekend, but the pattern turns drier starting in Parana, moving north.  That continues to keep the size of the 2nd crop corn in question, with downward adjustments likely unless good rains appear.
   # Conditions in Argentina are the most important in S. America at the moment; The heavy rains at harvest are causing severe problems in some spots, but are probably causing the impact to be exaggerated. Some think losses could total 1.5-2.0 mmt., which seems high with less than 40% yet to harvest. By our calculations, there’s only 10-13 mmt yet to harvest.
   # Funds are said to have bought 6000 contracts of soybeans, 3500 soymeal, 1500 corn, and sold 4000 wheat. 
   # The Dollar edged higher today, with a slight rise in interest rates giving it a lift.  Economic optimism is a little better today with the easing trade tensions.  The ECB has indicated they will offer guidance on timing of rate hikes as their quantitative easing ends.  US retail sales are out later today.

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

   # Wholesale beef is slightly higher with choice at $232.12. 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. But, the complexion of the cattle market is being clouded by the disparity between cash and futures, with futures are risk of breaking out to the downside. Some commercials even think cattle prices are in a precarious position, and could drop lower. 
   # Wholesale pork is steady at $73.55. Cash hog prices are expected to be firm again to start Tuesday.  Hog numbers should tighten faster than in recent weeks.