Schwieterman: Corn planting progress only 6 percent complete

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Corn                                      Estimated Fund Position

Trends – July Contract

Short Term: Up Net Long Futures and Options: 162027

Long Term: Up Change: -9000

Overnight Trade: N +4 @7:30 AM

Corn planting progress was much slower than expected at only 6 percent complete. Nobody seems too worried about it at the moment, but it is one of the worst starts on record. There still seems to be a lot of confidence that next week’s number will show big gains in planting, but the market will be sensitive to the forecasts. Yesterday’s high of $4.99 ¼ will be the key resistance in the July contract today. A close above that level will put the market back inside the old trading range.

Wheat                                  Estimated Fund Position

Trends – July Contract

Short Term: Up Net Long Futures and Options: -13291

Long Term:Up                   Change: -8000

Overnight Trade: Chicago: N +3 KC: N +3 @7:30 AM

Crop condition ratings declined again as expected. US wheat came in at 34 percent G-E (Unch) and 33 percent P- VP (+1). Improvement in the SRW offset declines in the HRW. Kansas wheat is now only 24 percent G-E (-2) and 32 percent PVP (+2). One of the big change of the week was the P-VP in Oklahoma, which was up 7 points to 61 percent. The SRW is improving, but it just doesn’t seem likely that we will see last year’s record national average yield duplicated. The 40-day moving average is holding as support in the July KW, but after yesterday’s big break a move to $7.25 looks likely this week.

Soybeans                            Estimated Fund Position

Trends – July Contract

Short Term: Up Net Long Futures and Options: 142012

Long Term:Up                   Change: -6000

Overnight Trade: N +6 @7:30 AM

The soybeans ended up posting sizeable losses yesterday thanks in part to talk of Chinese defaults and more imports from Brazil. The market is/was due for a correction, so now we are seeing the negative chatter. As the July soybeans approach $14.50, the talk will shift back to our impossibly tight old crop stocks situation. The entire function of the old crop soybean market is to insure that we import enough soybeans and meal to avoid shortages in the United States. Look for more corrective action today.

Live Cattle

Trend

Short Term: Down

Long Term: Up

Opening Calls: 10-20 Higher

Live cattle futures closed mixed on Monday, with the spot April off .75 and June-August modestly higher. Cutouts were sharply higher on moderate to fairly good demand. Overnight trade is trending higher as the market tries to build on Monday’s second half recovery. We expect cash to drag out toward weeks’ end again this week, with asking prices in the south near $148 and bids yet to be found. Talk of a major bank pulling out of some of their commodity trade had commodities in general on the defensive on Monday. Many markets are rebounding overnight, with the Dollar weaker.

Feeder Cattle

Trends

Short Term: Up

Long Term: Up

Opening Call: 10-20 Higher

Feeder cattle rebounded from early weakness to post moderate gains on Monday. Weaker corn values were the catalyst for the rally, with the grain off 6-7 cents for the day. Overnight corn prices are up 3-4 cents but have failed to have an adverse effect on the feeders. The cash index has gone on the defensive, falling 1.82 since Thursday of last week. Some sideways choppy trade is expected for the rest of the month.



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