What Traders are Talking About:
Overnight highlights: As of 6:30 a.m. CT, corn futures are 1 to 2 cents higher, soybeans are steady to 4 cents lower and wheat futures are 2 to 6 cents lower, with Minneapolis contracts leading the decline. Based on overnight trade thus far and the overnight news, grain and soy futures should open with a mostly lower tone at 8:30 a.m. CT, though price action is likely to be light and choppy ahead of USDA's April crop reports at 11 a.m. CT. Cattle futures are expected to open steady to firmer, while hogs are likely to favor a slightly weaker tone on the open.
* USDA April crop reports out today. USDA's April Supply & Demand Report is expected to show higher ending stocks projections for corn, soybeans and wheat. Corn carryover is expected to rise the most after the Quarterly Grain Stocks Report showed nearly 400 million bu. more corn stocks than anticipated. Traders are looking for roughly half of that amount to be added to the bottom line this morning, with feed and residual use likely to be cut. Modest upticks in carryover are expected for soybeans and wheat from last month. Based on the average pre-report guesses, traders expect corn carryover at 824 million bu., soybean ending stocks at 137 million bu. and wheat carryover at 731 million bushels. USDA will also update global production forecasts.
The long and short of it: The April Supply & Demand Report typically doesn't provide much suspense, but with uncertainties over how much USDA will up its corn carryover projection, this report has market-moving potential today.
* Chinese imports surge, exports rise less than expected. China amassed a surprising $884 million trade deficit in March following a surplus of $15.25 billion in February. Chinese imports rose 10%, though that was well short of expectations, while imports surged much more than expected by 14.1%. Meanwhile, China is investigating reports of distorted trade data since December, specifically the potential for overstated exports by exporting firms. China imported 3.84 MMT of soybeans last month, which was up 32.4% from February but down 20.5% from March 2012. For the first three months of this year, Chinese soybean imports of 11.49 MMT are down 13.4% from year-ago.
The long and short of it: China's surprising trade deficit last month is a potential cause for concern. It's interesting the export figure was disappointing as China launches an investigation into overstated export numbers since December.
* China also suffering from cold, wet spring. Cold temps pushed deep into the Southern Plains overnight, leaving the HRW crop vulnerable to freeze damage. Meanwhile, heavy rains (snow in some areas) fell on the country's midsection yesterday and will linger for a couple more days. The weather pattern is expected to remain cold and wet with the National Weather Service calling for above-normal precip and below-normal temps for the Corn Belt through at least April 19. This forecast is not beneficial for winter wheat and will push back the start of corn planting across much of the Corn Belt. China is also suffering from a cold, wet start to spring. An official with China's National Development and Reform Commission says 9.5 million hectares in northeast Chinese corn production regions are at risk, with just over half of that total being in Heilongjiang, China's top corn production province. Meanwhile, wheat areas south of the Yangtze River are at risk due to unseasonably cold temperatures.
The long and short of it: Once USDA's April Supply & Demand Report is out of the way, it will be interesting to see how quickly talk of corn planting delays picks up. It's still early, but it looks to be at least two weeks before active planting is possible across much of the Corn Belt. Still, traders generally believe the benefits of rains outweigh any negatives of corn planting delays at this point.
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