Johnston Pro Farmer Senior Markets Editor
wheat production expectations... USDA will release their first survey-based
estimate of the 2009 U.S. winter wheat crop on May 12 at 7:30 a.m. CT. The following
numbers "imply" a spring wheat crop of 565 million bushels.
calls. These calls originate more than three hours before the open
-- use caution, things change:
Corn: 2 to 3 cents lower.
Futures saw light profit-taking overnight. Futures ended last week on a strong
note, with July corn closing above the $4.20 level for the first time since early
January. For the week, corn finished "just" 7 cents above last week's
close, but improved the technical outlook. More focus will be put on the new-crop
situation this week after USDA releases their first 2009-10 Supply & Demand
table. Lower acreage this year has traders expecting a drawdown in stocks. However,
the old-crop stocks situation remains ample, which will limit upside potential
for old-crop futures.
Soybeans: 15 to 17 cents lower. Futures faced
profit-taking overnight, with crude oil under pressure. Old-crop contracts led
price gains last week amid strong export demand and tightening supplies. Soybean
traders will be focused on two factors this week -- USDA's Supply and Demand Report
Tuesday morning and China. USDA's 2008-09 balance sheet will show a smaller carryover
figure, although there is a wide range of pre-report estimates. The initial balance
sheet for the upcoming marketing year will feature bigger carryover. The focus
on China will be on whether or not they cancel any U.S. soybean purchases after
rumors of such action hit the market last week.
Wheat: 2 to 4 cents
lower. Futures saw light profit-taking overnight on spillover from neighboring
pits. Futures posted strong gains last week, with July Chicago wheat closing 20
cents above the previous week's finish. Wheat traders will more closely monitor
weather this week as the winter wheat crop is advancing and there are concerns
with the slow planting pace for the spring wheat crop. Traders' other focus will
be on USDA's Winter Wheat Production and Supply & Demand Reports. While the
report will show winter wheat production down sharply from year-ago, 2008-09 and
2009-10 carryover figures will be abundant.
cattle expectations: Watching beef market. Cash sources will be watching
the beef market early this week to determine the cash tone for later. Beef values
slipped last week, but movement surged. As a result of tightening supplies, some
packers will be in need of supplies. However, unless beef values stabilize, the
cash market will be weaker again.
Futures call: Firmer.
June live cattle finished about 50 cents above the previous week's close
on Friday, inching closer to the cash cattle market. Beef improvement improved
last week at lower prices, signaling a near-term low may be close at hand. In
order for cattle futures to build on last week's slight gains, beef prices need
to stabilize. Tightening cattle supplies have helped to limit downside risk in
the cattle market, but while supplies are tightening, cattle weights remain above
expectations: Mixed. The cash hog market is expected to see a mixed
tone this morning, as packers' profit margin have moved into the red. This will
limit cash improvement, although some packers will be willing to raise bids amid
Futures call: Mixed. Futures
closed sharply higher Friday. Strong late-week gains allowed hog futures to close
higher for the week. If H1N1 flu concerns continue to ease, both cash hog
bids and lean hog futures should build on late-week strength. While attitudes
have improved, the market isn't completely out of the woods as some key countries
still have export bans on some U.S. pork shipments. Unless there's a setback,
more export restrictions on U.S. pork should be lifted over the next month.