What Traders are Talking About:
Overnight highlights: As of 6:15 a.m. CT, corn and wheat futures are mostly 1 to 3 cents higher, while soybeans are 8 to 12 cents higher. Bulls will carry momentum into this morning's open. Cattle futures are expected to open mixed as traders await cash cattle trade. Lean hog futures are also called mixed.
* Limited drying weather in outlook. The forecast had been for "better" weather conditions across the Corn Belt this weekend and early next week. But as the week has progressed, forecasters have gradually added more precip into the outlook. While no heavy downpours are expected over the next week, the outlook is littered with small rain events. Typically these types of rains would be welcome on newly planted crops. But given the very wet spring, what producers need now is a stretch of warm, dry conditions that will allow saturated soils to dry out so they can make planting progress and to give planted crops a boost. Planting delays and soggy soils are reducing planted acreage forecasts and yield potential.
The long and short of it: If the forecast continues to call for multiple rain events over the next week, traders are unlikely to go home for the weekend short.
* Technical head fakes? December corn futures and November soybean futures both indicated potential short-term technical tops earlier this week, but both have bounced back and are leaning (currently) more toward the bullish side. December corn futures entered the May 28 chart gap yesterday and bounced before filling it, which is a bullish indicator. November soybean futures dropped back into the long-term downtrend yesterday, dipped below the 200-day Moving Average and then closed very strong.
The long and short of it: How December corn and November soybeans finish the week will be very telling from a technical perspective. As of now, they have a bullish slant.
* Jobs data key today. With the Fed considering when to taper its economic stimulus, there's greater focus on monthly jobs data. The labor market is one of the key factors that will help determine when it's the right time to pull back the reins on the economic stimulus. Heading into this morning's jobs data, economists are anticipating non-farm payrolls to have risen by 170,000 last month, while the unemployment rate is expected to have held at 7.5%. But there is some concern the data may be disappointing after ADP data earlier this week was weaker than expected.
The long and short of it: The jobs data will set the tone for the stock market and the U.S. dollar to close out the week. As a result, it will likely impact grain trade.
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