CMEGroup Grain Futures Calls:
-July corn called mixed.
-July soybeans called 3 to 6 higher.
-July wheat called mixed.
June US dollar is up 96 at 86.50. July crude is down $.16 at $69.88. June Dow futures are down 68.
-The Bank of Spain bailed out a Spanish bank called Cajasur over the weekend. This will keep trader focus on European debt problems.
-Over the weekend China’s president indicated they would loosen currency controls. No timetable was given however.
-Existing home sales for the month of April will be released today. The trade is expecting 5.63 million units to have moved. That would be up from 5.35 million the previous months. April numbers will be helped by the last month of the homebuyers tax credit program.
-BP plans to plug the Gulf well with mud and cement in the middle of the week. Oil has pushed 12 miles into the Louisiana marsh.
-Iran says it will abandon its agreement to ship uranium out of the country if the US pushes to impose new sanctions.
-Most of this week will be characterized by warm and dry conditions.
Grain Market Influences:
Corn summary… This market did not only have its support tested once but twice. In December, the 373 level has been recent support that held well today. It was tested right on the start of the day and tested again at noon. Seeing corn hold up against two selling attempts supports the idea that this market is range bound and is tough to break.
Similar to Friday, Chinese authorities over the weekend indicated they had enough corn to meet demand.
Soybean summary… Macro destruction was a good description for the tone this morning with talk of major countries pulling out of the Euro. This caused the dollar to move higher. At 730 am US unemployment came out very disappointing by adding 31,000 on the unemployment rolls.
The House will vote this week on the jobs bill. This also holds legislation to re-enact the $1 per gallon bio-diesel tax credit.
Wheat summary… Producers should know we have recommended to roll July wheat hedges to the December. The market is offering more than full carry and the CME is calculating for VSR on a daily basis to attempt convergence. The attempt at convergence makes as much sense as GMO wheat when end stocks are huge.
Rain fell last week in Australia’s wheat areas and more is scheduled. This may encourage farmers to plant more acres than intended.
An Iranian official indicates they will see 15 million tonnes of wheat production.
-Wholesale beef closes down $.45 for choice and down $.84 for select.
-Pork carcass cutout closes down $.23.
-Cash hogs are called steady to $1 lower.
June Lean Hogs are called 10 to 20 higher.
----Chart support 81.00 and resistance 85.80.
June Live Cattle futures are called mixed.
----Chart support 92.00 and resistance 95.90.
August Feeder Cattle futures are called mixed.
----Chart support 111.50 and resistance 115.60.
Livestock Market Influences:
Friday’s Cattle on Feed was viewed as neutral to live cattle and the Cold Storage report was viewed as positive to pork.
Lean hogs summary… The size of yesterday’s decline in wholesale pork prices shocked the trade. While everyone knows about the seasonal drop which happens at this time that was a little more than expected. June and December futures broke to new lows for the current downtrend on this news.
Live cattle summary… It was not too surprising to see cattle get hit today from outside market pressure. On the Food for Thought page of this report, we have placed a chart showing the Dow and cattle futures on the same chart. They both have highs posted near each other and have a similar looking sell-off.
CMEGroup Grain Futures Calls: