What Traders are Talking About:
Overnight highlights: As of 6:15 a.m. CT, corn futures are narrowly mixed, soybeans are 1 to 3 cents lower and wheat futures are mixed (Minneapolis) to lower (Chicago and Kansas City). A mixed to weaker open is anticipated this morning, based on overnight trade. Cattle futures are expected to open mildly firmer, while lean hogs are seen opening with a mixed tone.
* 14% of corn crop left to plant. As of Sunday, 86% of the U.S. corn crop was planted, meaning there are roughly 13.6 million acres left to seed, assuming March planting intentions were accurate. For perspective, those 13.6 million acres would be 1.4 million more than Illinois producers intended to plant as of March and only 600,000 acres fewer than Iowa producers planned to seed this year. In the primary corn production states, Iowa has 15% left to plant, Illinois 11%, Indiana 14%, Minnesota 18%, Missouri 17%, Nebraska 4%, Ohio 11%, South Dakota 9% and North Dakota 28%. That wouldn't be much of a concern if it wasn't the end of May and soils weren't highly saturated with more heavy rains in the near-term forecast. Seemingly many of those acres will get seeded in much-less-than-ideal conditions much later than hoped -- and some won't be planted.
The long and short of it: Market focus will remain primarily on corn planting for the rest of this week. But after that, USDA's initial corn crop condition ratings will steal some of traders' attention.
* Soybean planting delays gaining attention. While planting date is much more important for corn than soybeans, it was new-crop soybean futures that led Monday's price surge amid concerns with planting delays. As of Sunday, USDA reports 44% of the soybean crop was planted, which was 2 percentage points more than anticipated. Not a lot of soybean planting progress will be seen this week or likely next week as soils are very saturated across the Corn Belt, more rains are in the forecast and producers that are able to get into fields are likely to focus on trying to finish up corn planting. As a result, it will likely be mid-June or later before some of the latest-planted, full-season soybeans are seeded.
The long and short of it: November soybean futures moved to their highest level since Feb. 22, largely on planting delay concerns Tuesday. While planting delays are a concern, I'm a firm believer that price strength must be sold as planting delays don't necessarily equate to lower yields for soybeans.
* Fund money flow remains key. Funds bought 12,000 contracts (60 million bu.) of corn and 13,000 contracts (65 million bu.) of soybeans on Tuesday. While yesterday's price action suggests funds may be ready to actively flow money into the long side of the market, keep in mind where we are at on the calendar. The fund buying must continue into June to signal they are serious about the long side of the market.
The long and short of it: For sustained price rallies, funds must remain active on the long side of the market.
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