AgriVisor Morning MarketWatch

Friday, September 07, 2018
***** Corn down 1 to 1 1/4; soybeans lower by 1 1/4 to 2; Chicago wheat down 3 to 4 1/4 cents. ***** 

   # Negotiators remain in discussion over a NAFTA re-work, but a failure to come to terms by the end of the day will likely mean that Canada is left out of the agreement.  A deal reached between U.S. and Mexican representatives would be thought to have lower chances of passing through Congress than would one that includes Canada.
   # U.S. businesses were urging President Trump to reconsider new Chinese tariffs as the comment period ended yesterday.  The White House has now been cleared to issue an additional $200 billion worth of import taxes against the Chinese.  China has vowed to retaliate.   
   # The forecast is largely unchanged with rains expected for the Midwest into the weekend.  Parts of Illinois may have to bear heavy storms on Saturday.  A high pressure system turns the trend drier and warmer starting next week.  
   # Cash premiums at exterior ports stay defensive as harvest approaches.  Country basis is also weak with the help of interior end users that are well covered and facing softer margins.  Producer basis averages, central Illinois: corn, -41 1/2 Z; soybeans, -59 1/2 X.  Interior Iowa: corn, -53 Z; soybeans, -$1.01 X.
   # The Brazilian real is making sharp gains against the dollar this morning in follow-up of a several month long slide.  Brazilian politics are in disarray in the lead up to a presidential election.  The top-polling candidate is in jail while another in the running was stabbed at a campaign rally yesterday.  
   # Social/political goings-on in Argentina are no rosier.  The Argentine central bank is pumping up interest rates in an effort to fight inflation and a floundering peso currency. The government recently upped grain export taxes in an effort to reign in the fiscal deficit.  Port workers at the main shipping hub in Rosario are also striking in protest of layoffs by area grain handlers.  
   # The August jobs report provided a view of solid U.S. economic health.  Nonfarm payroll gains totaled 201,000 versus a consensus estimate of +190,000.  Wage growth was a strong 2.9 percent.  The unemployment rate stayed unchanged at a multi-decade low of 3.9 percent.  

***** Cattle futures fractionally changed on Thursday; October hogs finish higher  by the $3 daily limit. ***** 

   # Cattle futures have traded quietly since starting the short week with strength.  October futures have support and resistance from Tuesday’s $108.17-$110.57 range.  The redevelopment of a cash trade today should lend guidance to futures.      
   # Hogs are benefiting from short-covering strength that has been triggered by China’s pig disease problem.  Upside may be limited by the boards strong premium over cash prices.