AgriVisor Morning Marketwatch

Tuesday, March 12, 2019
   ***Good Morning***

***** Grains are starting the day narrowly mixed: soybeans fractionally higher, corn fractionally higher, with wheat 3-4 higher. ***** 

   # As far as the grains, the top story to start the day is the new CONAB estimates for Brazil. They lowered the soybean forecast to 113.5 mmt, down 1.8 mmt. from last month.  The primary change was a drop in the yield estimate.  Their corn forecast was raised 1.1 mmt. to 92.8 mmt.  First crop corn was reduced just slightly with a yield reduction. 2nd crop corn output was increased 1.4 mmt. to 66.6 mmt, primarily due to a bump in the yield forecast. 
   # AgRural also released a new soybean estimate today, raising their forecast 0.4 to 112.9 mmt. because of the better yields in the later harvested crops. As a whole, it’s looking like production near 113 mmt may be a fair number to use. They also indicated Brazilian soybean harvest is 57% complete as of Mar 7th; the 5-yr average is 47%.
   # Weekly wheat ratings improved in KS. USDA raised the g/e rating 2 points to 51%. OK ratings increased 3 points to 56% g/e. The Tx crop dropped from 36% g/e to 28%.  Early jointing in Okla is behind normal.  Corn planting in Texas is 11%, compared to 24% last yr. and 16% over 5 yrs.
   # Weather forecasts remain a part of the mix.  The longer range forecasts are not as cold as they were prior to yesterday, with the 8-14 day outlook  more normal with a mix of cooler and warmer conditions in spots.  But the 6-10 and 8-14 day outlooks remain on the dry side. Iowa weather forecasters see their snow cover completely melting this week. Still, there’s a lot of frost in the soil this year, meaning they will be slow to warm. 
   # Argentine weather will be generally dry into the weekend, with a few light showers possible. The weekend brings the next chance of more general rain.  Southern Brazil looks the same with the weekend rains about a day later. Northern Brazil will see showers continue.
   #   Reports indicate US Ambassador Lighthizer and US Sec of Treasury Mnuchin spoke with China Vice Premier Liu He yesterday, with the discussions focused on the next stages of a US/China deal. Some take that as a sign they may have completed a line-by-line review of a US/China Trade Pact. With that, people will be looking for an announcement of a meeting of US President Trump and Xi.
   # As a whole, the trading community is keeping a close eye on the Brexit vote as it could roil the foreign exchange markets, in turn moving commodity and equity market with it. The B Pound plunged when the UK AG said the new deal doesn’t remove the legal risks with the with the Irish border backstop.  That moved the Dollar index, which will have psychological repercussions. Still, keep in mind the Dollar basket is about 60% tied to European currencies. 
   # Meanwhile, there’s a lot of ongoing talk about economic problems in Arg., and risk of another move lower on the Peso.
   # Fund action yesterday, sold 12,000 corn; 8,000 soybeans; but bought 2,000 wheat.  

***** Cattle will start mixed/lower; lean hogs slightly higher. *****  

   # Wholesale beef is higher with choice at $227.36. There was some disappointment with the futures trade yesterday in the wake of the COF report, and that may serve to keep a lid on cash prices this week. Last week ended with cash prices in the high $120s. 
   # Wholesale pork is higher at $66.42. The cash trade should be firm again today with the lift in wholesale and futures.  The bigger talk fueling the market is hope China will be a buyer of pork sometime soon. Given that, hog futures could swing on talk, or not, about a meeting between Presidents Trump and Xi.