Schwieterman: Beef exports continue following BSE case

Corn                                                 Estimated Fund Position
Trends
Short Term: Down                        Net Long Futures and Options: 69406
Long Term: Down                         Change: -12000
Overnight Trade: N +3 3/4 Z +2
Opening Calls: 3-5 Higher

Once again the corn bounced in overnight trade following a poor close in the day session. Despite all the recent sales announcements, the corn cannot hold gains. Traders are more concerned with what USDA will print for a new crop yield because of the early planting pace, despite the fact that there isn’t a very good correlation between early planting and final yield. Export sales were adequate at 645,600 MT of old crop ag 180,600 MT of new crop sales. Next week’s totals will be very large. Plan on another two sided session.

Wheat                                              Estimated Fund Position
Trends
Short Term: Down                         Net Long Futures and Options: -98205
Long Term: Down                           Change: -2000
Overnight Trade: Chicago: N +3 1/2 KC: N +2 1/2
Opening Calls: 2-4 Higher

Wheat export sales were good at 386,700 MT of old crop and 357,300 MT of new crop sales. If shipments would improve a little, USDA might have to raise the old crop wheat export estimate. There is still nothing that suggests the wheat will do anything but follow the corn. Expect to see another day of consolidation.

Soybeans                                         Estimated Fund Position
Trends
Short Term: Up                               Net Long Futures and Options: 227907
Long Term: Up                                Change: +6000
Overnight Trade: N -1 3/4 X -6
Opening Calls: 2-4 Lower

Export sales were great at 926,200 MT of old crop and 483,000 MT of new crop sales. USDA is clearly under estimating soybean exports. At this week’s pace we will meet the current sales estimate in two weeks, but we have over 4 months left in the crop year. The soybean market is seeing some corrective activity, but breaks are a buying opportunity.

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

Live cattle futures rebounded from Tuesday’s limit lower closes, posting a moderate recovery effort, as the world sorts out the significance of the latest BSE case. None of the major importers of US beef are changing their stance on imports. Likely the strongest slap will come from closer scrutiny on the imported goods. Cash trade remains lightly tested for the week, with most asking prices well above current April LC prices. With the weeks’ kill running 21,000 ahead of a week ago, packers could need to become more aggressive in their purchasing efforts. Outside market influences are mixed this morning.

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

Most feeder cattle contracts recovered about a third of Tuesday’s limit losses on Wednesday. Softer corn values and the inability of the sellers to push fats to new lows gave support to the feeders. Overnight saw continued strength in the market, with gains of as much as .55 being posted as we write. Cash levels backed off sharply for about 24 hours, as the market sorted the news out. By midday on Wednesday country sales were showing solid recovery from the day before.

1. Beef bull management refresher
2. Beef research and resources update
3. Workshop to discuss nutrient application, management, stewardship
4. Help for flood affected farmers
5. Representative Lucas discusses new Farm Bill
6. U.S. May consumer sentiment highest in nearly 6 years

1. New school lunch beef recipes win approval from kids, foodservice
2. Prices for corn and soybeans, five years from now
3. Drier weather to give big boost to U.S. corn plantings
4. The relationship between retail gasoline prices and futures prices
5. Agriculture is expected to remain strong in the coming decade
6. What sick day? Farmers take just three a year

1. Insects. They’re what’s for dinner!
2. Tyson selects panel to monitor animal welfare program
3. World food supply depends on character, virtuous leadership
4. Commentary: Slanting the statistics
5. Buffet concerned about soil and starvation
6. Cold spring stunts upper Midwest hay crop