AgriVisor Morning Marketwatch

Friday, March 15, 2019
   ***Good Morning***

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

   # Maybe the bigger story today is again political.  China’s Parliament passed new laws opening China’s market to foreign investment, protects intellectual property and ends/ prohibits the forced transfers of IP. The changes are what the Trump Admin. was seeking as change to bring China’s economic policies more in line with the rest of the world. These changes certainly help pave the way for a trade deal to be completed. 
   # The other big story also involves China, and their hog herd. China’s ag ministry reported that its hog herd fell 16% year on year in February with a 19% decline in its sow herd as farmers cull their herds because of ASF. The same report said that the numbers were down 5.4 percent with the sow herd 5 percent down last month from January’s inventory. That’s a steep one month drop considering their overall hog herd is well over 400 mln. head. Meanwhile, they say domestic meat prices continue their rapid rise spurring food inflation.  Those 2 items don’t fit together, especially given the talk people are hesitant to eat pork. 
   # Meanwhile, China made their largest purchase of US pork in 2 years. Thursday’s report showed they bought 23,846 tonnes of U.S pork in the week ended March 7. Those purchases came with the 62% tariff currently in place.  That same story said they had culled 1 mln. head of pigs because of ASF, one-qtr. of 1% of their hog herd.
   # USDA will be wrapping up the collection of data for the March 29 reports on Planting Intentions and quarterly grain stocks.  Also, they are wrapping up data for the end-of-month quarterly hog report.
   # At 11 am central time, NOPA will release their February soybean crush data. The trade expects the number to be near 158.73 mln bu.  That would be the largest February crush on record by a 3.3% margin.
   # NOAA’s latest El Nino forecast suggests there’s an 80% chance a weak El Niño conditions will prevail in the N Hemisphere through spring; there’s a 60% chance it could persist through the summer.
   # The other big talk may be about the aftermath of the Midwestern storm and the flooding. According to NOAA, the Upper-Midwest has 98.7% of its area covered by snow at an average depth of 14.6”.  This compares with last year’s 82.0% and average depth of 8.0”.  The snowpack for this date is the largest since 2003.  
   # Weather forecasts indicate temps will warm up the next 2 weeks.  It will be dry in the 6-10 day period, but the 8-14 day outlook suggest wetter weather will be moving in from the west again. 
   # Argentine weather will be generally dry into the weekend, with a few light showers possible, extending through the weekend.  Showers are expected to persist across northern Brazil. 
   # Fund action yesterday; bought 17,000 corn; sold 3,000 soybeans; and bought 6,000 wheat.  

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

   # Wholesale beef is slightly lower with choice at $227.70. The cash market is expected to be steady weak, but with the transportation problems in the west, it’s not real certain. Beef export sales yesterday were still weak. 
   # Wholesale pork is higher at $68.80. Cash hog prices are expected to be steady/higher, consistent with transportation problems and the Chinese news discussed above.  Cash hog prices have had a significant jump in the past week, which could cool packer buying interest.