CORN
Corn futures gapped lower overnight from last Friday’s trading ranges to start the new month. July corn fell 13 cents 8.00-1/2 while slipping below the contract’s 10-day Moving Average support. Dec corn made an overnight low at 7.39-1/2 on a loss of 11-3/4 cents. New daily trading limits greet the new week and month. For corn, the new daily limit goes from .35 to .50 cents. Talk of planting delays offer support. The U.S. Midwest saw weekend rains with more on tap for mid-week this week, but warmer temps. We’ll get Weekly Planting Progress data later this afternoon. Higher U.S. corn and ethanol demand should help underpin prices. The dollar is up 41 points, keeping the up-trend alive. Crude, gold, silver and copper are lower. Stock index futures are seeing a modest bounce from last week’s fallout.
SOYBEANS
The soybean complex was lower overnight. July beans fell 19 cents to 16.65-3/4 after testing 17.00 for first time since July and August, 2012. November beans were down 15-3/4 cents to 14.99. Daily trading limits for beans reset today to $1.15 per bushel from .90. July meal lost 6.50 per ton to 426 overnight. July soy oil fell 1.95 to an overnight low of 82.23. China and Malaysia markets are closed due to holiday and the trade is starting to look ahead to the May 12 USDA Supply/Demand report. China is expected to sell 500 metric tons of reserve soybeans May 6. U.S. soybean export commitments could increase 100 mil bu. April Brazilian soybean exports were down 28% compared to last year. Going into last night’s session, Managed funds were estimated net long 162,000 soybeans, 80,000 soymeal and 99,000 soyoil. Traders may be reducing commodity positions in front of the U.S. Fed increasing U.S. interest rates and what that could do to demand.
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WHEAT
Wheat futures traded lower overnight on follow-through from Friday’s drop. July Chicago wheat was down 20-1/2 cents to 10.34-1/4 before trimming losses. July KC was down 15-3/4 cents to 10.90. July MPLS is fractionally lower to 11.65-1/2. New crop Matif markest are making new highs as World wheat import demand is expected to increase and lower Black Sea exports could shift demand to the EU. India and Pakistan is hot and India’s wheat crop is in decline. A dry U.S. HRW could shrink the crop size. Spot basis bids for hard red winter wheat held steady at grain elevators in the southern U.S. Plains on Friday and protein premiums rose, while farmers awaited much-needed rains to bolster their drought-hit crops, dealers said. Wet conditions and forecasts for the U.S. HRS crop remains supportive.
CATTLE
Cattle calls are mixed for today to lower. The trend is still lower, and that is being driven by technical selling, backed by demand concerns. There is no sign of a low in place currently. The cash market may be the best chance of building that low this week. April cattle ended its trading life on Friday, finishing at 141.900, after gaining 3.400 on its last day. June cattle posted its lowest close since March 4, and trade within one tick of the 132.475 April low. The market is technically hanging on by a thread and could be susceptible to more pressure this week as the market is looking for a near-term low. There was active fed cattle cash trade in the North last week at $144 to $148 live, and $230 to $234 dressed. That is steady compared to the previous week. Moderate to large volumes were traded in the South at mostly $140 live, which was steady with the previous week. Expectations are for cash trade to remain strong this week, which could support the market. The Choice cutout moved $7.57 lower last week, while Select decreased by $4.62/cwt. High slaughter levels and cold, wet weather have put a damper on the beginning of grilling season and the normal, seasonal rally, that beef would see this time of the year. Feeder cattle futures had some optimism on Thursday, and that faded quickly on Friday. Price opened firm, but quickly broke to new lows on the week. The feeder cash index gained .72 to 155.64.
HOGS
The hog market is called steady to lower. The hog market is moving into oversold territory, but the path of least resistance at this point still looks to be searching for a low. Demand concerns on the export front and the retail consumer are the fundamental concern pressuring the market. June hog futures broke through the 100-day moving average at $109.700 and may be headed for a small price gap on the chart from Jan 19 at 101.950. Afternoon direct hogs cash trade on Friday was 2.43 lower with a weighted average price of 100.14 and a 5-day rolling average of 102.60. The softer cash tone will likely pressure the market this morning. The premium that has been on the front end of the market to the cash market has evaporated. The lean hog cash index was .53 lower to 101.81 on Friday. For the week, the Lean hog index traded .56 higher. May hogs are at a .910 discount to the index, but June is still 4.565 higher. The lack of premium could help support the market. Closing pork retail values finished slightly higher, gaining .09 to 104.58 on moderate demand of 285 loads. Retail values trended softer on the week, losing $1.20 off Monday’s close.
Author
Matt Strelow