What Traders are Talking About:
Overnight highlights: As of 6:15 a.m. CT, corn futures are 1 to 2 cents lower, soybeans are mixed amid bull spread unwinding and wheat futures are being led lower by 4- to 6-cent losses in Chicago. Given the weaker tone overnight and lack of fresh supportive news, bears are likely to maintain control on the open this morning. Live cattle futures are called steady to weaker, while hogs are seen opening steady to firmer.
* Corn planting finally speeds along. Corn planters are rolling around the clock across virtually the entire Corn Belt this week as producers race to get crop planted after a delayed start. In fact, some are anticipating the strongest weekly planting progress ever with estimates upwards of 60% of the crop could be seeded by Sunday. I've even seen comments on social media indicating some will be able to finish their corn planting this week. While soil conditions have improved greatly, I have to wonder if the rush to get the crop planted will result in some problems later in the growing season. Agronomists will tell you some of the top-end yield potential has already been lost due to the planting delays. And if in the rush to get acres planted, some producers "mud in" the corn or simply go too fast, it could result in a further drag on yields.
The long and short of it: The rapid pickup in corn planting is weighing on the market for now as traders feel the bulk of intended corn acres will get seeded, but there's still a long growing season ahead and this crop already has several chinks in its armor.
* China to import a record amount of beans in 2013-14. China is forecast to import a record 66 MMT of soybeans in 2013-14 amid strong domestic demand and tight supplies, according to state-run China National Grain and Oils Information Center (CNGOIC). That would be up 11.9% from the current marketing year, in which Chinese soybean imports are expected to decline by 230,000 MT from 2011-12. The think-tank does not expect any major impact on soybean meal demand from outbreaks of H7N9 bird flu. Last week, USDA forecast 2013-14 Chinese soybean imports at 69 MMT in its first look at the new-crop marketing year. Meanwhile, CNGOIC says stocks of soybeans at ports have fallen below 4 MMT, the lowest level since 2010.
The long and short of it: With Chinese domestic production forecast to fall and demand rising, it's not a matter of if China will import more soybeans, but by how much in 2013-14. Strong Chinese demand will help keep new-crop soybean futures from plunging, but isn't enough to give the market support now as traders are mainly focused on 2013 crop prospects.
* Euro-zone GDP data disappoints. The top three economies in the euro-zone -- Germany, France and Italy -- continued to struggle in the first quarter, re-igniting concerns about the entire bloc. While German first-quarter GDP expanded by 0.1%, that was less than anticipated. France's economy contracted by 0.2% the first three months this year. And Italy marked a seventh consecutive quarter of recession as GDP contracted a greater-than-expected 0.5% in the first quarter. GDP data for the entire euro-zone will be released later this morning, but will almost assuredly show the region remain in recession. The disappointing first-quarter GDP data suggests the European Central Bank may have to further cut interest rates in an attempt to jump start the euro-zone economy.
The long and short of it: The disappointing data is putting pressure on the euro, which is supporting the U.S. dollar and weighing on commodities. The macro-economic environment is not bullish for risky assets such as commodities.
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