What Traders are Talking About:
Overnight highlights: As of 6:15 a.m. CT, corn futures are trading 5 to 7 cents higher, soybeans are mostly 7 to 15 cents higher and wheat futures are narrowly mixed. Corn and beans are expected to open today's session with a firmer tone on followthrough buying. Two-sided trade is expected in wheat, though a firmer bias is likely if corn and beans maintain overnight gains. Cattle futures are expected to open with a mixed tone, while hog futures are seen opening steady to slightly higher.
* Corn planting concerns rise. Corn futures surged Monday as traders' concern with the slow planting pace accelerated. As of Sunday, USDA reported only 5% of the U.S. corn crop was seeded -- a meager 1-percentage-point increase from the previous week. That was below traders' expectations of 9% according to a Reuters survey and marks the slowest pace since 1984. Virtually none of the corn crop has been seeded through the Corn Belt due to cold, wet conditions. USDA also reported only 2% of the corn crop has emerged. Given soggy soils and a more rain in the forecast, limited planting is expected again this week, though there will be more progress than last week.
The long and short of it: Based on the price response Monday, traders are now officially concerned with planting delays. But attitudes could quickly change if planters start to actively roll.
* Calendar a factor. The calendar tells traders it's time to start getting more concerned with planting delays. With each passing day, it's becoming more apparent a good portion of this year's corn crop won't be seeded by mid-May when agronomists consider planting to be "late." The calendar could also be playing a role in the massive fund buying that was seen yesterday as they position for the end of the month. Prior to yesterday's action, funds had sold 22,000 more contracts (110 million bu.) of corn than they had bought this month. After yesterday's action where funds bought 26,000 contracts (130 million bu.), they now have a net long position for the month. How quickly things can change. While fund buying was by far the most active in corn, they were also buyers of soybeans (7,000 contracts; 35 million bu.) and Chicago wheat (9,000 contracts; 45 million bushels).
The long and short of it: Fund money flow will remain key to near-term price direction. If yesterday was more than end-of-the-month positioning and marked a change in fund attitudes, it would be a bullish signal for grains.
* HRW crop continues to deteriorate. Ongoing drought and impacts from recent freeze events continue to deteriorate the HRW wheat crop in the Plains. When USDA's weekly crop condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500 point scale), the HRW crop dropped another 9 points to 255. Crop deterioration was noted in Kansas, Texas and Oklahoma, while the Colorado crop improved modestly and Nebraska was virtually unchanged. Further deterioration is expected in the weeks ahead.
The long and short of it: Traders will be keenly focused on findings and comments from the Wheat Quality Council HRW tour, which starts today and runs through Thursday as they seek further "ground truth" about the crop.
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