Traders' Concerns With Corn Planting Delays Heighten

April 29, 2013 01:18 AM
 

What Traders are Talking About:

Overnight highlights: As of 6:15 a.m. CT, corn futures are trading 10 to 12 cents higher, soybeans are mixed with old-crop contracts mildly firmer and new-crop contracts are slightly lower, while wheat futures are roughly 4 to 8 cents higher. Based on overnight trade and traders' heightened weather/crop focus, corn and wheat futures are expected to open higher this morning, while soybeans are likely to remain choppy. Cattle and hog futures are expected to open with a mixed tone this morning.

 

* Fieldwork begins, but rainy week ahead. Farmers moved into fields across much of the Corn Belt over the weekend as temps warmed, though the bulk of their efforts were field prep instead of planting. USDA's Crop Progress Report this afternoon is expected to again show very minimal progress on corn planting. Plus, this week's forecast offers a daily chance for rain across much of the Corn Belt, with colder temps likely the second half of the week. That will continue to delay fieldwork.

The long and short of it: With the calendar soon to flip to May, traders' concerns with corn planting delays are heightening. As a result, they are starting to build weather premium into the market.

* HRW wheat crop in focus. Talk of damage to the HRW wheat crop is building as private crop scouts get into fields and further examine impacts from recent freeze events. The attention will be heightened this week as the Wheat Quality Council will run its annual HRW tour through Kansas and far southern Nebraska Tuesday through Thursday, with concurrent tours in Oklahoma and eastern Colorado. The "ground truth" from these tours has potential to be market-moving throughout the week. The crop estimate from tour scouts will be especially attention-grabbing.

The long and short of it: If the HRW tour results are worse than expected, it would increase the urgency to build weather premium into the market. If tour findings aren't as bad as feared, it will be hard to spark sustained buying interest in wheat futures.

* Don't forget the macros. In addition to the crop/weather focus, grain traders will also be keeping an eye on the broader economic picture this week. The Federal Open Market Committee concludes its two-day meeting Wednesday. The focus will be on the Fed's aggressive bond-buying program and how that that will continue. The European Central Bank will decide on monetary policy on Thursday. Plus, the Labor Department will release employment data Friday morning.

The long and short of it: Crops/weather are the primary focus for grain traders this week, but macro-economic data can't be ignored as that has been a major driver of fund money flow recently.

 

Follow me on Twitter: @BGrete


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