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AgriVisor Morning Marketwatch

 
Monday, March 11, 2019
   ***Good Morning***

***** Grains are starting the day mixed: soybeans 2 lower, corn 1 higher, with wheat 1-2 lower. ***** 

   # The primary focal point to start the week is the US/Chinese trade pact.  Reports out of China indicate negotiators have reached agreement on the key issues that started the trade dispute.  There is an indication the Chinese Parliament will approve the framework of the pact presented to them. The biggest fear the Chinese have is that Pres. Trump could walk away from a proposed agreement at the last minute at a summit with Pres. Xi like he did with the N. Koreans
   # In other govt. news, Pres. Trump will issue his proposed govt. budget for 2020.  In it he is expected to ask for another $8.6 bln. for a wall on the southern border.
   # Fed Chairman Powell indicated in an interview Sunday the Fed has no plans to raise rates the rest of the year. He said our economic variables remain robust, with the weakness in other world economies one of the bigger ingredients tempering their interest in raising rates.  
   # In other political news related to commodities, it looks like the new NAFTA pact, USMCA won’t be voted on by Congress until sometime in the latter part of 2019. 
   # US weather is starting to become a part of the day-to-day trading mix.  This week’s generally wet weather pattern is not going unnoticed given the level of soil moisture, snow pack, and warmer temps.  River flooding and flooding in some fields in wetter areas are being noted.  The long range forecasts are cool, dry. Even though moisture might abate, cool weather will not promote much, if any drying. 
   # Weather forecasts show Argentina will have showers to start the week, turn dry through the week, with showers coming again this weekend. Southern Brazil will have the same pattern, only delayed by 1-2 days. Northern areas are going to see continued showers over the next week. 
   # The latest number we’ve seen for Brazilian soybean harvest is 52%. Corn harvest is 4% done in Arg, with only a few scattered soybean fields harvested in the far north. 
   # Chinese pork prices are said to be nearly 4% higher this week. Some put it to less pork being produced because of ASF. Hog prices are at a 14 month high, with hog culling thought to be about 1 mln. head(their herd is over 400 mln.).  The  govt. agency that buys pork to support prices has scaled back their purchase levels, which would be consistent with lower overall output.  There is some concern in their feed industry that a new US/China trade pact could bring corn imports putting downward pressure on prices. 
   # There are various known tenders on tap for wheat/corn this week. 
   # Friday’s CFTC report finally got the data series up-to-date. For the week ending March 5th funds were net sellers of roughly 72k lots of corn, 14k lots soybeans, 14k KC wheat, 14k Chicago wheat. They were net buyers of approximately 6k contracts of meal. Managed money is estimated to be net short 176k lots of corn, 72k lots Chicago wheat, 50k lots soybeans, 44k contracts KC wheat and 43k lots of soybean meal. The funds are long roughly 21k contracts of soybean oil. 
   # Fund action Friday, sold 12,000 corn; 8,000 soybeans; but bought 2,000 wheat.  

***** Cattle will start higher; lean hogs slightly higher. *****  

   # Wholesale beef is steady/firm with choice at $226.13. The cash trade will be quiet to start the week, but prices ended last week at $128 live and $205 dressed.  Friday’s COF report had lower placements bringing the on-feed numbers back to last year’s level. 
   # Wholesale pork is slightly lower at $65.04. Cash hog prices should start the day slightly stronger, but warmer weather and higher cash prices should stimulate movement.
 

  SYMBOL IN EVEN SQUARE