AgriVisor Morning Marketwatch

Thursday, May 17, 2018
   ***Good Morning***

***** Grains are firm as we start the day; soybeans are 4-5 higher, corn 2 higher, with wheat 7-9 higher. ***** 

   # Weather seems to be the biggest influence giving the grain markets a lift today, with the trade not only talking about conditions in the US, but also about conditions in other parts of the world.  Firm energy markets are also helping guide prices higher in the early trade.
   # Forecasts point to rain potential in the S. Plains, but traders are noticing some deterioration in the vegetative health maps.  Rain potential in the N Plains could slow planting, and cause some acreage to be shifted away from wheat. Australian farmers are sowing some fields into dry dirt.  One long range forecast pointed to heat potential in Europe this summer and drought potential in the Black Sea region.
   # For corn, the wet weekend and the moisture in the long range forecasts are pointing to continued planting delays, and to possible acreage losses.  One S. American sees the conditions in Parana as worse than they were 2 years ago. That Black Sea drought forecast isn’t going unnoticed either.
   # Soybeans are following the lead of the other grains, with the ongoing US/China talks effectively keeping a lid on buying interest. 
   # Soybean export sales, 506,600 tons, were near the lower end of expectations; soymeal sales, 421,700 tons, were good; corn sales, 1.11 mmt, were near the upper end of the range, wheat sales, 194,800 tons, were again anemic. 
   # Brazilian producers are already talking about expanding soybean plantings again this year, with interest heightened by high prices and ideas they will get a larger share of the Chinese market.  Already, a few are forecasting Brazil will finally out produce the US.
   # There is talk China may expand imports of ethanol as a way to help ease some of the trade imbalance between the US and China.  Yesterday’s weekly ethanol output implied a grind near 110 mln. bu. 
   # There’s as much talk about NAFTA ass there is the Chinese trade issue with today said to be the last day to get an agreement on the calendar to get passed before a new Congress is installed next year. There is some leeway, but it is said to make it difficult, with no one looking for an agreement today. Negotiators are said to be close.
   # Funds are said to have sold 12,500 contracts of soybeans, 4500 soymeal, 5,000 corn, and 1500 wheat. 
   # Rising Treasury Bond yields continue to lift the Dollar, lifting it near 5 month highs. 10 year T-bond yields are 3.12%, the highest they have been since 2011. Brent crude oil futures hit $80 for the first time since Nov 2014. 

***** Cattle should start the day steady/weak; Lean hogs mixed/higher. ***** 
   # Wholesale beef is slightly lower with choice at $231.03. Cash cattle prices slipped lower on a light/moderate volume, with some cash trading as low as $115. 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 steady/firm at $74.39. Cash hog prices are expected to be firm again today, with some bids expected as much as $1 higher, with higher wholesale prices and tighter numbers giving a lift.