What Traders are Talking About:
Overnight highlights: As of 6:00 a.m. CT, corn futures are trading 3 to 5 cents higher, soybeans are 5 to 8 cents higher in all but the July contract which is around a penny higher and wheat futures are 2 to 5 cents higher with Chicago contracts leading gains. I expect bulls to maintain the upper hand when the day session starts at 8:30 a.m. CT. Cattle and hog futures are expected to be firmer this morning.
* Crop progress/conditions -- the hidden truth. USDA says 96% of the corn crop is emerged, which is only 3 percentage points behind normal. But it's where there's corn left to emerge that's the problem. Iowa still has 7% left to emerge, Minnesota has 10% left and North Dakota has 13% left to emerge -- as of June 23. Based on March planting intentions, that's nearly 1 million acres in Iowa, 900,000 acres in Minnesota and 533,000 acres in North Dakota that have yet to emerge -- as of June 23. If that corn isn't already out of time, the fat lady is warming up her voice in a hurry. For soybeans, USDA put planting at 92% complete as of Sunday, meaning there are still 6.17 million acres intended for soybeans left to plant. Emergence stood at 81%, meaning there are still 14.65 million acres of soybeans left to come out of the ground. Like corn, it's where those bean acres are located that's largely the concern. Iowa still has 940,000 soybean acres left to plant and 2.35 million acres left to emerge. Minnesota has 408,000 acres left to plant and 1.29 million acres left to emerge. Those beans are going to need a very late fall to max out remaining yield potential. Most likely, they will yield more like double-crop soybeans than full-season soybeans -- if they get planted. Meanwhile, USDA says 65% of the corn and soybean crops are in "good" to "excellent" condition, while only 8% corn and only 7% of soybeans are in "poor" to "very poor" condition.
The long and short of it: Relatively strong crop ratings are helping mask some of the crop problems that exist -- at least in traders' eyes.
* More rains falling. Saturated areas of the western Corn Belt and Wisconsin are getting more rains this morning as yet another front passes through the region. Rains are forecast to linger into Wednesday before a drier pattern emerges. Localized flooding is becoming a greater issue for many areas and saturated soils are impeding crop development. Reports of crops being washed out or under water are increasing, especially in the wettest and heaviest hit areas. Unfortunately, it will be too late for replanting efforts, especially for corn, in these areas once soils finally dry. The "holes" in this year's crops in the western Corn Belt and Wisconsin are increasing amid the persistent heavy rains, though the market has been slow to react.
The long and short of it: It's hard to convince traders there's such a thing as too much of a good thing when it comes to rain, but that's definitely the case in a growing number of areas this year.
* Winter wheat harvest picking up. As of Sunday, USDA pegged winter wheat harvest at 20% complete overall. Kansas was just 8% harvested according to USDA, but reports from the state signal harvest activity will be in full swing by today across much of the state. Not unexpectedly, yields (test weights) have improved as combines push north through the state. By most accounts, the best wheat in the state is in eastern and northern areas, whereas southern and western areas of the state were harder hit by drought and spring freeze damage.
The long and short of it: As combines more actively roll, it will be increasingly difficult for the wheat market to fend off harvest-related hedge pressure.
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