Corn Crop Starts In Near Record Condition
Jun 03, 2014
Good Morning! Paul Georgy with early morning comments for June 3, 2014 at 4:30 am CDT.
Grain futures are lower on US crops getting off to a great start with near perfect weather conditions.
The soybean markets are divided into two segments; old crop and new crop. The tight supplies of old crop soybeans due to aggressive exports and domestic crush are providing support while index funds rolling out of the July contracts is providing some resistance.
New crop soybeans are driven by planting progress and good growing weather which are both negative to price outlooks. Planted acreage from USDA at the end of the month could play a major part in ending stock number.
Corn planting is done, at least in the eyes of the trade with 95% complete versus 94% average. Corn good to excellent ratings, at 76%, blew the doors off the average guess of 70%.
Soybean planting is now 78% complete which surpassed the 75% trade was estimating.
Spring wheat planting was 88% which is on the 5 year average. Winter wheat conditions held steady with 30% of the crop rated good/excellent.
Safras e Mercado said Brazilian farmers have sold 72% of the 2014 soybean crop which is line with last year when farmers had 71% sold.
At the end of each month NOAA updates their monthly weather outlook. During the month of June they are expecting the cornbelt to have near normal temps and normal to slightly above normal precipitation.
The Obama plan to cut greenhouse gas emission from power plants is expected to be unveiled this morning by the EPA.
Brazil’s trade ministry said yesterday that they exported 7.6 mmt of soybeans in May compared to 8.25 mmt during April.
Outside markets have to be watched closely as the US Dollar Index appears to be set for a breakout to the upside. This could cause further pressure on agriculture commodities as it increases export prices.
Livestock futures are waiting for confirmation of less hog supplies due to the PEDv. Many traders are getting tired of waiting and have been liquidating long positions. Heavier weight hogs are going to market, offsetting the lower numbers. Last week wass the first time in recent months where carcass weights were lower than the previous week. Pork cutout value is up 2.23.
The cattle trade is dealing with high feedlot replacement cost and producers feeding cattle to heavier weights. Cheap feed cost is helping support feeder cattle while the breakevens on cattle currently being placed in feedlots are projected to lose several hundred dollars per head using today’s deferred fed cattle values. Beef cutout is weaker with choice down .23 and select down .42. The CME Feeder Index is 193.87.
Markets as of 4:30 AM CDT
- Jul Corn -3
- Jul Beans -7
- Jul Wheat -1 1/2
- Jun Cattle +.42
- Jun Hogs +.57
- Jun Dlr +.05
- Jun S&P -2.75
- Jul Crude -.13
- Jun Gold +1.70
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