What Traders are Talking About:
Overnight highlights: As of 6:15 a.m. CT, grain and soy complex futures are mixed with mild bull spreading seen in corn and soybeans. The choppy trade is likely to carry over into the open this morning. Cattle futures are expected to open under pressure from Friday's Cattle on Feed Report, while hog futures are called steady to firmer.
* Big jump in corn planting. Producers across the Corn Belt made major progress last week, likely pushing the corn planting pace to upwards of two-thirds done in this afternoon's update from USDA. Based on social media reports, many producers are done with corn and have a good start on soybeans, although heavy overnight rains and a wet forecast will keep planters parked for a while. In traveling through areas of northeast Iowa over the weekend, there weren't nearly as many planters out as I expected. I assume producers were taking a break following torrid corn planting earlier last week.
The long and short of it: While there's still roughly one-third of the corn crop left to be seeded and it's late May, traders are not concerned with the corn planting pace.
* PED found in Iowa hogs. USDA confirmed Friday porcine epidemic diarrhea (PED) has been found in Iowa -- the first outbreak of the disease in the United States. USDA is checking surrounding states to see if the outbreak is more widespread. PED is potentially deadly and typically impacts young pigs the most. Summer-month lean hog futures faced heavy selling pressure on rumors of a disease in the U.S. hog herd on Friday, as traders feared it could hurt pork demand. But USDA says PED is not a food safety concern and does not affect humans.
The long and short of it: Pressure on summer-month hog futures was overdone Friday and contracts should see short-covering today. This will lead to at least a modest reduction in hog numbers down the road, which is supportive for deferred lean hog futures.
* Bearish Cattle on Feed Report. Traders were expecting a negative Cattle on Feed Report, but the numbers came in more bearish than expected. All three categories were on the negative side of the average pre-report guesses, with On Feed at 97%, Placements at 115% and Marketings at 102% of year-ago. The data is especially negative for fall- and winter-month live cattle futures, as the Placements category was the most negative. The two other categories were virtually as expected.
The long and short of it: Some of this negative data is likely already "in" the market, which should help limit selling pressure today.
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