Schwieterman: Inconsistent exports hurt corn market

Corn                                             Estimated Fund Position
Trends
Short Term: Down                     Net Long Futures and Options: 119739
Long Term: Down                     Change: -5000
Overnight Trade: Z -5 3/4 N -4 1/2
Opening Calls: 5-7 Lower

Corn export sales were pathetic at 208,900 MT due to large cancellations by “unknown destinations.” Ethanol production continues to be strong, but the inconsistent exports are really hurting this market. The December corn is trading along the bottom end of the trading range and may stay there until we get some better news. Plan on another two sided directionless day where selling options is the best money maker.

Wheat                                         Estimated Fund Position
Trends
Short Term: Down                   Net Long Futures and Options: -75895
Long Term: Down                    Change: -3000
Overnight Trade: Chicago: Z -4 3/4 KC: Z -1 1/2
Opening Calls: 3-5 Lower

Wheat export sales were poor at 317,100 MT, but at least it was better than last week. The December KW is still trading near the October low and so far the support is holding. The problem is that without good demand news for either the wheat or the corn, there isn’t much reason to be a wheat buyer. Failure of the October low would not be a surprise.

Soybeans                                   Estimated Fund Position
Trends
Short Term: Down                   Net Long Futures and Options: 13622
Long Term: Down                    Change: -5500
Overnight Trade: F -3 1/4 N -2
Opening Calls: 3-5 Lower

The bright spot in the export sales report was the soybeans and soybean meal. Bean sales were reported at 746,100 MT and meal at 201,500 MT. China was the big buyer of beans and Mexico bought the biggest share of the meal. There has been more talk of Chinese buying this week and confirmation of that would be supportive. USDA’s export estimate is so low that it wouldn’t take much buying from the Chinese to make a big impact on our balance sheets.

Live Cattle
Trend
Short Term: Down
Long Term: Up
Opening Calls: 10-30 Lower

Live cattle futures reversed early weakness to post modest gains on Wednesday’s close. Cutout values continue to climb, with the choice select spread widening once again. Cash trade should start taking shape today, but the trade remains far apart heading into this session. Overnight activity has been lower, with macro news continuing to weigh on equities and commodities. The US Dollar continues to rise vs most of the world currencies. Estimates for Friday’s report are 104% on feed, 99% placed and 101.4% marketed.

Feeder Cattle
Trends
Short Term: Up
Long Term: Up
Opening Call: 10-30 Lower

Feeder cattle futures reversed early weakness to close moderately higher on Wednesday. January forward posted new contract highs into the close. Weakness in the corn market on Wednesday and again overnight will keep support under the feeders. World economic news continues to be the main restriction in the feeder market. Placements and weights in Friday’s report are expected to be smaller.

1. Showers to slow U.S. corn seedings from blistering pace
2. White House urges Senate to cut crop insurance in farm bill
3. Weather report: Thunderstorms dot the southern Plains
4. Corn market reacted poorly to the Crop Progress data
5. Oil falls on concern about Federal Reserve direction
6. Packer margins jump higher, feeding margins bleak

1. Michigan hay buyers should plan purchases early
2. U.S. cattle placements rise in April as feed costs subside
3. New animal identification rules aid disease traceability
4. Corn planting pace turns from record slow to record fast
5. Ag markets were mixed to start the new week
6. Corn and soybean prices continue to retrace 2012 drought rally

1. Tyson selects panel to monitor animal welfare program
2. BeefTalk: How do we get the next generation to raise beef?
3. 2014 Farm Bill: Are we near an agreement?
4. Farm bill and immigration reform action needed
5. Boxed beef hits record highs, cattle weak to lower