AgriVisor Morning MarketWatch

Wednesday, May 16, 2018
   ***Good Morning***

***** Grains are mixed again today; soybeans are 7-8 lower, corn 1 higher, with wheat 2-3 higher. ***** 

   # In the absence of other news the trade is likely to focus on weather(US and Braz) and news coming from the meetings between US and Chinese officials. Regarding those, the possibility N Korea could call off talks might make U.S. negotiators a little less compliant with the Chinese. 
   # Rains are heaviest in the northern Corn Belt/N Plains the next 2-3 days, but are expected to moderate after that. The 6-10 tends normal/dry with normal/wetter to follow.  Temps are expected to be above normal.
   # The rest of the Corn Belt will see rains late week/weekend, with the longer range outlooks tending above normal. Temps will be warm.  That should be good for the new crops. The S. Plains tends to stay above normal for precip, helping bolster the new crop.
   # Argentina is still plagued by wetness, but the focus has turned more to Brazil. Weather in Mato Grosso has turned to the dry side, but some areas do get showers.  The head of a major grain association thinks yields in Mato Grosso could be 15% off, and that state alone accounts for about 40% of the 2nd corn crop.
   # There seems to be a persistence, and maybe growing talk, about potential drought risk in the Midwest this summer.  Warmth and dryness across parts of the Corn Belt have sparked some of the talk, but it’s much too soon to have a confident outlook. 
   # At 9:30 the weekly ethanol grind will be out, but it should be another strong number with the grind around 107 mln. bu. 
   # These is a story again about soft Chinese soy demand and the fact Brazilian soybean prices have dropped below the US Gulf, but the latter is not abnormal for this time of year.  As for China, it seems like buyers are trying to talk the market down.  Brazilian producer sales are thought to be 64% done, slightly ahead of normal. Arg producer sales could be near 90% with prices at record high thanks to the collapse of the Peso.
   # Informa is looking for corn planting to be about 1 mln. acres higher than USDA, soybeans about 350,000 higher, with spring wheat off about 200,000.
   # Funds are said to have sold 1500 contracts of soybeans, 2500 soymeal, bought 12,000 corn and 2500 wheat. 
   # Rising Treasury Bond yields are lifting the Dollar, especially against the Euro. There’s talk the Fed may tighten policy faster and more often given the changing economics.

***** Cattle should start the day slightly lower; Lean hogs mixed/higher. ***** 
   # Wholesale beef is slightly lower with choice at $231.64. Cash cattle prices slipped lower on a light/moderate volume, with some cash trading at $116-$117. The declining futures are stimulating aggressive marketing of hedged cattle to capture basis. It will take a lift in futures to stop the slide in cattle, with June futures hovering just over a tipping point. 
   # Wholesale pork is slightly higher at $74.24. Cash hog prices are expected to be firm again to start Wednesday, with higher wholesale prices and tighter numbers giving a lift.