What Traders are Talking About:
Overnight highlights: As of 6:15 a.m. CT, corn futures are trading mostly 1 to 2 cents higher, soybeans are mostly 4 to 6 cents higher and wheat futures are showing gains of 1 to 4 cents. Overnight trade points to a firmer open this morning, though the jobs data at 7:30 a.m. CT could influence the open of the day session. Cattle futures are expected to open steady to higher, while hogs are called mixed.
* How serious are the corn planting delays? Corn planting delays helped spark the sharply higher to limit-up move in corn futures Monday. But since that time corn traders have been trying to decide exactly how concerned they should be with the corn planting delays. With a wet forecast through the weekend. The forecast is much warmer and drier early next week, though there is a chance for additional rains late next week. It's going to be awhile before many producers are back into fields -- the first time this spring for some. While there's a lot of talk about planting date, my biggest concern with soil conditions as the corn seed goes into the ground. If producers get too concerned with planting date and "mud in" the corn, it could have just as much impact (if not more) on yields than the planting date.
The long and short of it: There's a growing concern with corn planting delays, although traders aren't overly worried yet. The level of concern could increase quickly if there's very little planting progress by mid-month. But traders are still hopeful most of intended corn acres will get planted.
* HRW crop needs time and help. Final results from this year's Wheat Quality Council HRW tour showed an average yield on samples taken of 41.1 bu. per acre, which is down from 41.9 bu. per acre last year and the five-year tour average of 42.3 bu. per acre. The average guesstimate of tour participants on crop size in Kansas is 313.1 million bu., which is down from a five-year average guesstimate of 341.3 million bushels. Last year, USDA pegged the Kansas wheat crop at 382.2 million bu. on a yield of 42 bu. per acre. Not surprisingly, drought stress and impacts from multiple spring freezes showed up throughout Kansas, though the evidence was greatest in western and southwestern areas of the state. Tour scouts say the crop is going to need extra time as its at least a couple weeks behind in development and rain just to live up to the low yield potential measured on tour.
The long and short of it: Based on price action this week, tour results were mildly supportive though not overly shocking. But this now puts focus on late-season weather and how that impacts crop prospects.
* Macros still very important. Grain traders are focusing more on fundamentals amid tight old-crop stocks of corn and beans, corn planting delays and HRW crop struggles. But the macro-economic environment is still very much a key factor for grain markets. After all, that will largely drive fund investment in grains -- commodities in general. While central bankers around the world continue to do all they can to improve economic health, there are plenty of warning signs and concerns. As I've stated before, China is the 800 lb. gorilla when it comes to commodities. But with that said, much of China's economic well being and appetite for commodities is driven by demand from the U.S. and Europe for the multitude of goods China produces.
The long and short of it: The current macro-economic environment is not strong enough to encourage active investor buying in commodities, though central bankers are trying to do all they can to keep global economies from weakening.
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