What Traders are Talking About:
Overnight highlights: As of 6:15 a.m. CT, corn futures are mostly 6 to 7 cents higher, soybeans are mostly 8 to 13 cents higher and wheat futures are mixed. Based on overnight trade and weather/planting concerns, bulls should maintain control in corn and beans on the open this morning. Cattle and hog futures are expected to open steady to firmer after strong closes last Friday, but demand concerns are likely to limit buying interest.
* Weather, planting delays back in focus. The cool and very wet holiday weekend is grabbing traders' attention to open this shortened trading week. Heavy rains across the country's midsection over the holiday weekend halted planting efforts and led to ponding and flooding. Some producers who thought they were done with corn planting will now need to replant some of the washed out/flooded areas, while it will be a while before soils are ready to plant again, especially with forecasts calling for daily rain chances throughout this week. With final crop insurance planting dates for corn already here or fast approaching for Corn Belt states, producers who aren't done planting corn must make some tough decisions. And while it looks like soybeans are likely to pick up some acres, that market outpaced gains in corn overnight.
The long and short of it: Traders added some weather premium into the market overnight, but the key is how much sustained buying interest develops.
* China makes second major purchase of U.S. wheat this year. China bought as much as 650,000 MT of U.S. wheat last week, according to China National Grain and Oils Information Center (CNGOIC). This was the second major purchase of U.S. wheat this year, following the booking of 14-16 cargoes in April. The state-run think-tank says the latest purchases were for July-September delivery at a price of $320 to $328 per MT CIF, about 11.6% cheaper than current domestic wheat prices in China. While CNGOIC didn't name the buyer, export sources told Reuters it was state stockpiler Sinograin as the Chinese government is looking to replenish state reserves.
The long and short of it: Rumors of Chinese demand helped fuel corrective gains in wheat futures last week, but confirmation of the purchases is failing to spark followthrough buying in a "buy-the-rumor, sell-the-fact" reaction. Still, the Chinese demand signals not only does the country need wheat supplies, but it sees value at current price levels.
* Not a good weekend for grilling. With demand concerns hanging over the red meat markets, favorable weather was needed over the holiday weekend to kick off the "official" start to the grilling season Unfortunately, Mother Nature didn't cooperate, as cool, wet weather dampened holiday plans for many. While the heaviest rains were seen across the country's midsection, the wet weather stretched to the heavy population/consumption areas of the East Coast. The demand concerns are especially strong in the cattle/beef market as Choice boxed beef prices have surged to an all-time high heading into the key summer grilling season.
The long and short of it: If post-holiday beef and pork movement aren't strong, demand concerns will increase.
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