What Traders are Talking About:
Overnight highlights: As of 6:15 a.m. CT, corn futures are mixed amid mild bull spreading, soybeans are mostly 3 to 7 cents firmer and wheat futures are mixed with a slight upside bias. Based on overnight trade, a choppy start to the day session is likely in corn and wheat, while beans are expected to favor the upside. Cattle and hog futures are expected to open with a mixed tone this morning.
* Weather looks more promising for planting progress. Scattered rains are falling on areas of the western Corn Belt this morning and are expected to continue across the region the next couple days. That will likely push farmers back out of fields after the best stretch for fieldwork the past several days. But traders are more focused on the 6- to 10-day and 11- to 15-day forecast, which hold the hope for improved planting conditions. Traders generally believe active planting progress will be seen over the next two weeks and corn planting could get close to normal by the end of the month. As a result, traders don't look for a major shift in acres from corn to soybeans. They also believe recent heavy rains will have positive longer-term benefits for crops.
The long and short of it: While some producers still can't get into fields, there has been a pickup in planting activity this week and more active planting progress is expected in the weeks ahead.
* Chinese trade data raises red flags. China surged to a $18.16 billion trade surplus in April from an $884 billion deficit in March, topping expectations for a $15.1 billion trade surplus. Exports rose 14.7% last month, while imports increased 16.8%, both jumping more than anticipated. While this breaks a recent string of negative economic data out of China, it doesn't come without some questions. Chinese exports rose sharply last month despite declines to its two biggest customers -- the European Union (-6.4%) and U.S. (-0.1%). Exports to Hong Kong were up a surprising 57.2%, which raises some red flags. Meanwhile, China's central bank signaled it is prepared to change its monetary strategy to fend off inflows of speculative capital as the country struggles to control a flood of cash inflows from overseas. The move came as April exports surged past expectations, sparking speculation the figures were artificially inflated by investors who were disguising speculative bets on the yuan as trade payments.
The long and short of it: China's trade data is friendly for commodities, but there is skepticism to its accuracy.
* Chinese bean imports pick up in April. China imported 3.98 MMT of soybeans last month, a 3.6% increase from March, but 18.4% below year-ago. Soybean imports through the first four months of this year stand at 15.47%, down 14.8% from year-ago. Meanwhile, China is expected to import a record amount of soybeans in the May-July period. But given slumping feed demand due to bird flu and weakening crush margins, some of the summer soybean shipments may be canceled. China has previously washed out some purchases of U.S. soybeans for summer delivery.
The long and short of it: There is risk of Chinese soybean demanda slowing from expected levels through summer, which would not be a positive for soybean futures.
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