AgriVisor Morning Marketwatch

Thursday, December 06, 2018
   ***Good Morning***

***** Grains are mixed to slightly lower to start the day; soybeans 10 lower, corn 1-2 lower, and wheat mostly 5-6 lower. ***** 

   # The normal weekly slate of market reports are delayed a day because of the funeral; weekly ethanol today, export sales Fri. and CFTC Mon.
   # 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. The arrest is tied to their alleged violation of U.S. sanctions on Iran. 
   # We continue to read that details of what China might buy from the US have been ironed out, but no one is yet sure.  We read today purchases will include soybeans and LNG, but little else is known.  The news though leads us to believe the soybean purchases will be for govt. reserves bypassing the tariff issue. The 5 mmt. number continues to surface, although we’ve seen no formal commitment. But we also hear the govt. could simply rebate crushers for soybeans they buy, offsetting the tariffs, but not removing them.  With negotiations set to begin in Washington later this month, we’d expect at least some initial “good faith” buys soon.
   # The was a story out this morning about the potential change in China/US relations and better soybean price prospects might change producer planting attitudes for 2019, but there’s still a lot of time for planting decisions to change, especially with less fall field work completed due to weather. 
   # 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
   # StatsCanada put out their latest crop estimates this morning; all wheat 31.769 mmt(neutral), canola 20.343 mmt(slightly friendly), barley 8.380 mmt(neutral). 
   # 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. 
   # Brazilian farmers in the north are somewhat excited for 2nd crop corn. The early soybean plant is expected to lead to early harvest, allowing the 2nd crop corn to be planted early this year too. That could pull the key development period forward, helping avoid the yield drag the dry season causes at the end. 
   # Egypt had a wheat tender overnight.  The offers we saw this morning were for Russian, Romanian, and Ukraine wheat. We didn’t see any US, but it may just not have been on the list or weren’t deemed low enough to compete this time. It does appear they have started to issue payment for ships showing up at port with wheat cargoes.
   # USDA did report 198,120 tons of corn were sold to Mexico.
   # There was an increase in deliverable tenders being made at the CBOT. 69 corn tenders were issued, with 140 tenders for wheat. The 758 soyoil continues to wind down redeliveries.  The corn deliver date was through June 28, meaning there are a lot of old open positions yet. 
   # Arg. weather will be dry into the weekend, some showers on Sunday, but dry again to start next week.  Temps will slowly lift to warmer than normal. Southern Brazil will have a similar pattern. Shower activity will persist across northern Brazil, with temps slowly lifting to warmer than normal levels. 
   # Funds were said to have sold 4,000 corn, 3,000 wheat, but bought 2,000 soybeans.
   # The detention of Huawei’s CFO sent tensions through the equity and financial markets overnight, causing some to questions whether the US/China thaw might have been short lived. Weakness started as markets opened in the Far East, and marched west with the Sun. Signs of weakening economies have been a drag of recent. Crude oil markets are down in sympathy with stocks, but also uncertainty with OPEC’s meeting. 

***** Cattle should start the day slightly lower; Lean hogs lower. *****  

   # Wholesale beef is slightly lower with choice at $213.26. The cash trade was firm yesterday, with live trades at $118 and dressed at $185. Those levels should get good offerings as the week ends. 
   # Wholesale pork is slightly higher at $71.70. Packer bids are expected to be softer again today for live hogs, but with good processing margins, that could quickly shift if they don’t get enough animals to meet their needs. Problems with ASF continue to be a drag on buying interest.