What Traders are Talking About:
Overnight highlights: As of 6:15 a.m. CT, corn futures are narrowly mixed, soybeans are 7 to 8 cents higher in old-crop contracts and 1 to 3 cents higher in new-crop contracts, while wheat futures are 1 to 3 cents lower. The day session should open in line with overnight trade, barring any late-breaking news as traders are mostly focused on preparing for Wednesday's USDA reports. Cattle futures are seen opening mixed while hog futures are expected to open with a firmer tone.
* Corn focus shifting from planting pace. As of Sunday, 95% of intended corn acres were seeded, according to USDA, leaving 4.87 million acres left to plant. While it's very late to be planting corn -- and some of those acres will be claimed as prevent plant -- traders are turning their attention more toward the growth and development of what has been seeded. USDA put emergence at 85% compared to the five-year average of 92% on this date. But the condition of the corn crop declined amid the persistent soggy soils, especially in Iowa. When USDA's weekly crop condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500 point scale), corn dropped 8 points to 363, roughly 5 points lower than last year at this time. Iowa accounted for the bulk of the ratings decline, with lesser deterioration in Illinois and Minnesota. Click here for more details.
The long and short of it: Traders are hoping this week's warmer conditions across the Corn Belt will help perk up the corn crop, which they should. But warmer weather can't make up for poor stands caused by seed that did not germinate or was washed out.
* Bean planting, emergence advance slowly. As of Sunday, soybean planting was 71% complete and emergence stood at 48% -- in line with expectations, but the slowest since 1996. That suggests there are still 22.3 million acres left to plant and 40.1 million acres that still need to emerge. Producers will be able to make progress with soybean planting this week, but how the Tuesday/Wednesday rain event develops will determine if it's moderate or strong progress. USDA's initial soybean crop ratings of the season will be released next Monday, meaning focus will shift to the condition of the crop instead of the planting pace.
The long and short of it: While soybean planting is severely delayed in some areas, the condition of the crop will soon mean more to traders than unplanted acres to date.
* China buying U.S. pork? Rumors circulated through the market Monday that China was shopping for U.S. pork, which triggered a strong price rally in summer-month lean hog futures. June hogs rallied to $100.40, the highest level for a front-month contract since August 2011. But hog futures closed well below session highs as the demand rumors were not confirmed. The October through April 2014 contracts ended moderately lower and posted bearish reversals for the day.
The long and short of it: Conditions are very bullish in the hog market right now. While that could trigger additional near-term price gains, markets typically top when conditions seem most bullish. Plus, we're into the time frame when the hog market normally posts a seasonal peak.
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