AgriVisor Morning MarketWatch

Friday, January 04, 2019
***** Corn futures up a penny at the break; soybeans higher by 3 1/2 to 3 3/4 cents; Chicago wheat up 2 to 2 1/2. ***** 

   # Brazil's weather forecast features improved chances of rain in the week ahead. Dry conditions have developed throughout much of the country recently, taking top end off of soybean yields and serving a threat to full season corn crops as well. In Argentina, conditions have been too wet and look to remain that way over the next 6-10 days. 
   # The U.S. 6-10 day outlook is split with higher chances for precipitation in the West and normal odds in the East. Wetter is the trend for the 8-14 day model prediction. The next two weeks look likely to run warmer than average across most of the country. 
   # The U.S. Drought Monitor shows normal soil conditions across much of the Midwest, save for small patches of dryness in southern Missouri.  Pockets of long-term drought persist in North Dakota and throughout nearly all of the U.S. Southwest. 
   # The Buenos Aires Grains Exchange estimated Argentina’s soybean plantings at 90 percent complete and rate the standing crop at 41 percent Good/Excellent versus 51 percent G/E a year ago. 
   # U.S. exporters are left to compete with a bumper crop just harvested in Ukraine. The Black Sea country could see corn shipments rise by a whopping 60 percent or more over the previous season. USDA has estimated Ukraine's wheat production for 2018/19 at 25 million tons, or just under half of what the U.S. is expected to haul in for the year.
   # Chinese importers are reported to have been shopping for U.S. soybeans in the recent couple of days. Export deals have become difficult to confirm now that the government shutdown has interrupted the regular release of reports on trade and other market facets. Developments involving U.S./China trade talks remain skewed friendly as of late. 
   # On the government shutdown, no material progress there it seems, after the House of Representatives passed two temporary spending bills that President Trump has threatened to veto because they do not include funding for the border wall.  President Trump will again meet with top Democrats to discuss a possible resolution before those bills arrive to the White House for signature.
   # Uncertainty over the government shutdown has investors on edge, but a strong December employment report helps support gains for stock futures this morning. The government reported nonfarm payrolls increasing by 312,000 last month. Before Thursday’s private payrolls report, economists were expecting today’s new jobs number to be something closer to 180,000.   

***** Live cattle futures down $0.20 to $0.37 on Thursday; feeders off $1.17 to $1.50; hogs down $0.12 to up $0.45. ***** 

   # Cattle futures are starved for fundamental input as export data remains unavailable due to the shutdown and ahead of the cash market developing later today. Cash prices rose last week, but they do not have the same support from the winter storm storyline that grabbed headlines last week. Supporting cash price potential, though, are strong domestic demand and related recent gains for wholesale beef prices.  
   # China still doesn't look to have African swine fever under control as cases of the disease are now thought to have been found at more than 100 pigs farms across the country. The Chinese government this week warned pig producers of criminal consequences that would follow attempts to cover up ASF problems on the farm. Speculators are still positioned on hog futures with the expectation that China will become a big U.S. pork importer if a trade deal can be reached in the coming couple of months.