More Corn Belt Rains Coming... but

May 14, 2009 07:00 PM

Julianne Johnston Pro Farmer Senior Markets Editor

From Pro Farmer

Active weather pattern continues... A strong cold front made its way across the Corn Belt this week,
bringing more rains to already saturated soils, which resulted in flash flooding in the eastern Corn Belt. Rains have kept producers from making large corn planting progress in the eastern Belt this week (and all spring), with planters working between rains in the western Belt.

Showers and thunderstorms are expected to return to Iowa today and spread into the eastern Belt once again -- which is not nearly enough drying time to allow producers back into fields. Rains are expected to linger on Saturday in the eastern Belt, which could add to flash flooding.

However, there is hope for some planting progress to be made next week in the eastern Corn Belt. Weather models show a chance for high pressure to build next week, bringing sunshine and warmth to much of the Corn Belt. This could provide enough drying to allow fieldwork in Illinois and Indiana... if the forecast holds.

Opening calls. These calls originate more than three hours before the open -- use caution, things change:

Corn: Mixed. Futures were 1 cent higher to 1 cent lower overnight. Futures closed slightly higher yesterday, posting a high-range finish. Support came from strong weekly export sales and planting delays. July corn posted an inside day up on the daily chart. Resistance lies at this week's high of $4.32, while support lies at $4.20.

Soybeans: 1 to 6 cents higher. Futures were firmer overnight. Futures extended gains into the close to finish near session highs on support from tightening old-crop stocks and technical momentum. July soybeans posted a new-for-the-move high and stopped just 2 1/4 cents shy of the $11.50 level, which is a pivotal point on the chart. Consecutive closes above that level would open significant upside potential.

Wheat: 1 to 5 cents lower. Futures were weaker overnight on firmness in the dollar. Futures were choppy yesterday, but Chicago closed firmer on help from neighboring pits. Minneapolis wheat gained momentum on spring wheat planting delays. Minneapolis July wheat posted a new-for-the-move high, but stopped at the bottom of the early October gap area. Filling that gap at $7.35 would build upside momentum.

Cash cattle expectations: Steady to $2 higher. Feedlots started moving cattle Thursday afternoon at $2 higher prices around $86 in the Plains. Because of the late-day trade, it's uncertain if showlists were cleaned up. But cash sources expect only light clean up sales today. With June live cattle well below this week's cash trade, the strength in the cash market should support futures today.

Futures call: Steady to firmer. Futures are called to open steady to firmer as futures are at a discount to confirmed cash trade of $85 to $86 in the Southern Plains. Yesterday, June live cattle posted an inside day of trade on the charts and finished mid-range. Resistance begins at this week's high of $83.90 and extends to the April 23 high of $84.30 and then the April high of $85.67 1/2. Support begins around the $82.00 level and extends to the May low of $81.15.

Cash hog expectations: Steady to weaker. Packers are expected to offer steady to weaker cash hog bids across the Midwest to close out the week as they shift their focus to ailing cutting margins. For strength in the cash hog market to restart, the pork market must continue to strengthen. While pork prices have firmed, the rate of gain hasn't kept pace with the increase in cash hog bids, which is why packer margins have plunged.

Futures call: Mixed. May hogs closed higher yesterday as their expiration, while the rest of the pit closed moderately to sharply lower. The CME lean hog index is projected up $1.66 to stand at $60.58. June hogs now have the responsibility of watching the cash index more closely, and are trading at around a $7 premium. If traders anticipate near-term cash improvement, downside risk in futures should be limited. Futures are called mixed today amid spreading.

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