AgriVisor Morning Marketwatch

Friday, December 07, 2018
   ***Good Morning***

***** Grains are firmer to start the day; soybeans 2-3 higher, corn 1-2 higher, and wheat mostly 4-6 higher. ***** 

   # The initial fear that the U.S. China agreement may get snarled by an arrest in Canada of a top Huawei executive(CFO) for extradition to the U.S. seems to be softening. The arrest is tied to their alleged violation of U.S. sanctions on Iran. 
   # Export sales were good across the board today. USDA reported, soybean sales at 895,000 tons, corn sales at 1.178 mmt., wheat sales at 711,800 tons, and 287,300 tons, all at or better than the high end of expectations. The only piece for China was a small cancellation of soybeans, but this was a period before the Trump/Xi meeting. 
   # USDA reported 224,000 tons of HRW were sold to unknown destination.
   # Drier weather has allowed Arg. planting harvesting to move forward.  54% of the soybeans are planted, with 41% of the corn.  2.8 mln. hect or wheat have been harvested, with yield reports generally good.  Scattered late frost have hurt yields in some spots, but the BA exchange still sees a 119.2 mmt. crop. There were frost reports in some areas again overnight. Agrural believes 89% of Brazil’s soybeans have been planted. Another estimate put it at 93%.  Brazil’s early conditions are generally good; Argentina’s more variable.
   # Reuters put out estimates for next week’s USDA s/d reports. Corn stocks 
are expected to be 1.738 bln. bu., up 2 mln., soybean stocks 945 mln. bu., down 10, and wheat stocks at 956 mln., up 7.  Look for world numbers in individual commodity comments
   # CONAB will have new Brazilian numbers out next week, but at this point in the season, we doubt significant change, although soybeans could be revised up. 
   # There is a story out of Kansas today that winter wheat plantings might not reach last year’s level. Late soybean harvest and wet conditions impeded activity earlier in the fall, causing it to get too late to plant some fields.
   # Corn, wheat and soyoil deliveries against Dec. were a part of the mix again last night, but delivery dates are now current.  There was a good stopper in the corn deliveries too. 
   # Arg. weather will be dry through the weekend, but showers are to return the early part of the week.  Temps will moderate from a warm weekend into early next week. Southern Brazil will be dry with showers returning midweek. Showers will continue to be a feature in the northern producing areas.
   # Funds were said to have sold 4,000 corn, 4,500 soybeans, but bought 2,500 wheat.
   # Equity traders will be looking ahead to this morning’s jobs numbers; they expect non-farm payrolls to rise 198,000.  The number was 155,000 new jobs. There is ongoing anxiousness about the impact the detention of Huawei’s CFO might have on the US/China talks.  Parts of Mueller’s report on Russian collusion might be revealed today.  OPEC has not come to an agreement with Iran on a token crude oil output cut, although the early market surge implies something is happening. There is some fear the Fed could tighten policy too far, pushing the economy into recession.

***** Cattle should start the day mixed/lower; Lean hogs near steady. *****  

   # Wholesale beef is slightly lower with choice at $212.67, on somewhat slow volume. The cash trade was defensive yesterday, with live trades slipping to $115 and dressed to $183. Offerings at higher levels were good. Check export sales today, they have been somewhat disappointing of recent.  
   # Wholesale pork is slightly higher at $72.12. Packer bids are expected to be near steady for hogs today. Packer margins are very good, but there are a lot of hogs entering the pipeline. Check export sales this am, they have been a small positive recently; traders will be looking for any new China business too.