What Traders are Talking About:
Overnight highlights: As of 6:15 a.m. CT, corn futures are 1 to 3 cents lower, soybeans are fractionally to 4 cents lower and wheat futures are steady to as much as 7 cents lower. Based on overnight trade, grain and soy complex futures are expected to open the day session with a slightly weaker tone at 8:30 a.m. CT. Cattle and hog futures are expected to open steady to weaker, though price action is likely to be choppy, especially in the cattle market ahead of this afternoon's Cattle on Feed Report.
* When will corn planting delays become a market focus? I've gotten a lot of questions this week concerning corn planting delays and when they will become a major market focus. While the level of concern among producers is rising, markets have absorbed the corn planting delays without much price reaction. In fact, December corn futures are on pace to finish lower for the week. To answer my question in the headline, I think it will be May before traders get overly concerned. If USDA's Crop Progress Report for May 5 (released May 6) shows corn plantings well behind normal -- which seems likely -- then traders' level of concern will start to rise. May 10-15 is generally the time frame when agronomists say corn yield potential starts to decline for each day corn planting is delayed.
The long and short of it: The calendar likely needs to flip to May before traders' level of concern with corn planting delays rises.
* Forecast stays cold, but a little drier. The National Weather Service (NWS) forecast for April 24-26 calls for a continuation of below-normal temps across the entire Corn Belt and Plains, but is drier as below-normal precip is expected over the western half of Illinois, Iowa, southern Minnesota, Missouri, Nebraska, South Dakota and Kansas. Normal precip is forecast for other areas of the Corn Belt during the period. The NWS forecast for April 26-May 2 calls for below-normal temps receding slightly, but are still expected over the northern and far eastern Corn Belt. Below-normal precip is seen over all but the far northern Corn Belt during the period.
The long and short of it: The forecast offers some hope for improved weather conditions, but flooding will be an issue is the Dakotas and areas of Minnesota as temps rise and snow melts.
* Watch fund activity. Fund activity has been the most telling source of day-to-day price activity in the grain and soy complex the past couple weeks. While market fundamentals are still important, it's been speculative money flow that has been largely driving price action. That tells me markets are fully aware of the current fundamental situation and are waiting for the next batch of strong market-moving data to surface. In the mean time, funds are moving money around. That's not surprising. But the level of daily fund activity, especially in the corn market, has been high.
The long and short of it: Aside from March 28 and April 1 when USDA's report data was the key price driver, fund money flow is the current, key price driver in grain and soy markets.
Follow me on Twitter: @BGrete
Need a speaker for a seminar or special event? Contact me: firstname.lastname@example.org