Corn futures were mostly unchanged overnight and traded inside of Monday’s 4 to 5 cent trading ranges. We’ll look for mixed trade today the market is already pricing in an expected large corn supply The accelerated planting pace supports a potential big crop in 2020-21 marketing year. Farmers planted 51% of the crop as of May 3, according to USDA’s Weekly Update. This is well ahead of the 5 year average at 39% and 30 percentage points faster than last year. Now, wetter conditions and colder temperatures are making their way across much of the newly planted area. Crude is up $2.00/bbl this morning and the dollar and stock index futures are stronger which offer opposing outside-market forces on corn.
The soy complex was mostly flat last night as the trade keeps a close watch on U.S.-China relations regarding the ”Phase 1” and COVID-19. Monday’s Weekly Export Inspections at 11.7 million bushels was disappointing and the 2nd lowest total for the marketing year. Any tariff news could lead the direction for the day which is in contrast to last week when China made several purchases of U.S. beans. Overhead pressure is seen in the form of soybean planting coming in well ahead of schedule at 23% complete versus the 11 percent 5-year average and, the return of higher dollar – lower Brazilian real movement in the two currencies.
Winter wheat futures are lower again this morning with Chi down 6 cents and KC down 11. The momentum has clearly turned lower in Chi wheat. KC contracts are hanging in there with more of a consolidation phase on the charts. Rains across Europe and the Black Sea region have eased some dryness concerns in that area’s wheat producing regions. This impacts world wheat prices and is pressuring U.S. prices along with a rebound in the greenback. Winter wheat conditions improved by 1% to 55% good-to-excellent. Mpls wheat was unchanged overnight.
Live cattle futures are called steady to higher. Strong retail values and June futures’ discount to cash market has spurred money flow into cattle market. June, at 88.00 is playing catch-up to the cash market, but cash is a moving target as the market opts for other forms of price discovery during these uncharted times. The next upside objective for the contract is around 90.75. Choice carcasses broke the $400 level on Monday afternoon after rallying to record highs 7 days in a row. That market is up 70% since April 8, which should keep a form of fundamental support for cash trade in place.
Lean hog futures are called mixed to higher. Strong retail values stay supportive and encourage the industry with help from the Government to get plants safely back into operation. The technical picture is strong and overbought after June reached it’s highest level since March 27. More short covering is possible with momentum favoring the bulls. Plant closings and possible reopening will still be a key in the near-term as traders await news of progress getting more meat into the pipeline in a safe manner.