Johnston Pro Farmer Senior Markets Editor
trimmed corn carryover more than expected... The "market friendly"
report surprise in the May S&D Report was for the corn market. At 1.6 million
bu., old-crop carryover was trimmed 100 million bu., which traders expected USDA
to raise carryover slightly. New-crop carryover, at 1.145 million bu., also came
in below expectations, signaling supplies could tighten more than traders previously
thought for the upcoming season. Even more, with planting delays getting serious
in the eastern Corn Belt, some traders are also talking about the prospect of
new-crop corn carryover coming down even more as some acres will likely shift
in billion bushels
Traders did an excellent job of anticipating the slashing
of old-crop soybean carryover to 130 million bu., as that figure hit the target
for the average trade guess. New-crop carryover at 230 million bu. came in slightly
below the average trade guess, but traders believe USDA's acreage figure will
likely be revised upward in the June report, raising carryover, as well.
in billion bushels
The data was positive for the wheat market, as both old- and
new-crop carryover estimates came in below traders' expectations. The winter wheat
production estimate of 1.502 billion bu. also came in below traders' expectations,
which was also helped to lift wheat futures yesterday.
calls. These calls originate more than three hours before the open
-- use caution, things change:
Corn: 5 to 7 cents higher.
Futures saw spillover gains in overnight trade. Futures gapped higher on the
open based on USDA's tighter-than-expected old- and new-crop corn carryover estimates.
Corn closed 6 to 8 cents higher. July corn gapped higher on the open and
briefly moved above the $4.30 level, leaving a 5 1/4 cent gap open.
11 to 15 cents higher. Futures were higher overnight on help from strength
in crude oil. Nearbys closed firmer yesterday, while deferreds finished slightly
lower amid spreading. Traders started yesterday's session by unwinding bull spreads
in corrective trade. By the close, however, bull spreading was the featured activity
again. Tightening old-crop stocks and strong demand remain the key fundamental
Wheat: 3 to 7 cents higher. Futures saw spillover in
overnight trade from yesterday's gains. Futures closed 2 to 3 cents higher in
Chicago yesterday, supported by USDA's reports, although saw two-sided trade.
Now that July Chicago wheat futures have inched above the April high at $5.84
1/2, that level is key support on a closing basis. A close back below that level
would open risk to the March and April lows from $5.12 1/2 to $5.10 3/4.
Cash cattle expectations: Watching
beef market. The beef market improved on Monday's performance as prices were
60 to 99 cents higher on movement of 268 loads Tuesday. If the beef market continues
to strengthen, it would trigger more talk of a short-term fundamental low in the
Futures call: Mixed. Futures are
called to open mixed as traders wait on clearer direction from the cash market.
Yesterday live cattle futures capped off a choppy day of trade by closing mixed.
June live cattle gapped slightly higher on the open, but filled the gap. The low-range
close opens the door to spillover pressure this morning.
hog expectations: Steady to higher. After a 32-cent decline Monday,
the pork market recovered by rising $1.14 Tuesday on movement of 100.1 total loads.
With the strength in the pork market, packer demand for hogs will remain strong.
Packers are competing for a declining supply of market-ready hogs.
Futures call: Mixed. Futures are called to open mixed amid spreading.
Futures closed firmer yesterday, which could lead to spillover support, however.
June lean hog futures entered the big April 27 downside price gap, which was the
initial reaction to the H1N1 outbreak. Filling that gap at $71.50 is needed to
confirm a major low has been posted and signal market concerns with the H1N1 situation
are in the past.