WEATHER SUPPORTS CORN AND BEANS OVERNIGHT... As of 6:30 a.m. CT, corn futures are trading mostly 6 to 7 cents higher though the July contract is steady, soybeans are mostly 8 to 14 cents higher, Chicago wheat is mostly around a penny lower and Kansas City and Minneapolis wheat futures are mixed. The U.S. dollar index is holding near unchanged this morning.
VERY WET WEEKEND, MORE RAIN AHEAD... Heavy rains pounded much of the country's midsection over the holiday weekend, leading to washouts, ponding and localized flooding. As a result, some replanting will be required. Forecasts call for daily chances of rains through Friday, with many areas likely to see additional heavy totals. Due to the very wet soils, planting efforts have been put on hold again as producers wait for fields to dry out so they can resume planting. With the final crop insurance planting date quickly approaching (already here for some states), producers will need to make some key planting decisions soon.
THE WEEK AHEAD… Congress is out on its Memorial Day recess and will return June 3. On tap in the Senate is a resumption of the farm bill debate, with immigration reform likely on the Senate floor in mid-June. There will still be plenty of potentially news-making events, with economic updates on manufacturing, housing and the next update on first quarter GDP due out Thursday. Friday's Personal Income and Outlays data will contain the update on consumer action the Fed watches the closest -- personal consumption expenditures.
SENATE FARM BILL IN FOCUS NEXT WEEK… Farm bill leaders over the holiday were trying to get an agreement on the scope and number of additional amendments to be considered when the Senate late on June 3 resumes its farm bill debate. The chamber is expected to finish farm bill votes, including likely passage of the measure, most likely next Wednesday. The most important possible amendments ahead include crop insurance changes some members want to propose. Meanwhile, House Ag Chairman Frank Lucas still doesn't have an official House floor date for farm bill consideration, but he has signaled mid-June.
CHINA BUYS LARGE TONNAGE OF U.S. WHEAT... USDA reported a daily sale of 180,000 MT of U.S. SRW wheat on Friday. But according to China National Grain and Oils Information Center, the country purchased as much as 650,000 MT of U.S. wheat last week. While the state-run think-tank didn't name the buyer, export sources told Reuters the purchases were made by state stockpiler Sinograin.
FOOD PRICE UPDATE… USDA's Economic Research Service (ERS) late Friday issued its food price forecast update and left its outlook unchanged for a 2.5% to 3.5% rise compared to 2012 (both for food at home and food away from home). The forecast means that prices are likely to increase more than in 2012, but that overall inflation is expected to be near the historical average for both indexes. Inflation is expected to remain strong, especially in the first half of 2013, for most animal-based food products due to higher feed prices. For most food categories not directly affected by the 2012 drought, however, inflation is expected to be at or even below normal levels.
FOCUS ON POST-HOLIDAY BEEF TRADE... Demand concerns continue to hang over the cattle market, meaning traders will closely monitor boxed beef movement coming out of Memorial Day, the "official" start to the grilling season. To ease the demand concerns, traders will want to see strong post-holiday beef movement. But traders are also keeping a close watch on boxed beef prices as many feel a price top is near given the recent string of record highs.
CASH HOGS CALLED MOSTLY STEADY... Packers are expected to open the week offering steady cash hog bids at most Midwest locations. But if plants are short-bought on slaughter needs coming out of the holiday weekend, demand for cash hogs could be stronger than anticipated, which could lead to firmer bids as market-ready supplies are tightening.
OVERNIGHT DEMAND NEWS... Taiwan tendered to purchase 23,000 MT of U.S. corn and 12,000 MT of U.S. soybeans. Lebanon tendered to buy 25,000 MT of optional origin milling wheat.