The grain markets on this Monday morning look about a bleak as the skies do here in Northern Illinois, with corn and wheat both slipping into lower territory. Beans, in turn, have mustered a little bounce after venturing a touch lower to start but in light of the breakdown this market suffered last Friday, it would appear to be more of a dead cat bounce than any re-emergence of bulls. Generally speaking, unless soggy conditions count, we have limited fresh news to look at as we begin trade and little on the calendar.
That said, weekly planting progress will be updated this afternoon and trade estimates are as follows; Corn 55% complete, beans 30% and spring wheat 50%. Managed funds have turned a bit friendlier towards the grains as the Commitments of Traders report told us they increased longs by another 26,000 contracts in corn and purchased 33,000 contracts of wheat, which has finally swung them into a net long position. Over in the soy complex though that are evidently less enamored by the outlook as they sold 50,000 contracts of beans, 3,000 contracts of meal but unwound 6,000 oil shorts. It would appear they have been served up at least a minor bowl of indigestion for breakfast this morning.
On the international front, Ukraine reports solid planting progress for the spring. They estimate that overall planting is 84% complete, which includes 3.8 million hectares of corn, 1.5 million hectares of spring barley, .41 million peas and .18 million spring wheat. Over in oilseeds, it was also reported that they had planted 4.9 million hectares of sunflowers.
Round two of the U.S Chinese trade talks is set to take place this week in Washington, and nothing seems clear at this point. In a surprising turn over the weekend, President Trump tweeted that he plans to work to give the Chinese firm, ZTE, a maker of smartphones and telecommunication equipment, “a way to get back into business, fast.” Just last month the US Commerce Department had blocked American companies from selling parts or providing services to this company due to the fact that according to Commerce, they have violated a deal in which said firm had agreed to pay a $1.2 billion fine for previous infractions. In turn, it was reported late last week that China had stepped up the inspections of US pork after finding “problems,” but deny they are targeting any specific country. Maybe I am missing the bigger picture, not to mention the fact that I tend to be a skeptic, but once again, it would appear that U.S. agriculture is coming out on the short end of the stick as so often seems to be the case in international trade “negotiations.”
Marcos are basically a mixed bag this morning, with the exception that the U.S. Dollar is under a little pressure. While I recognize that when we move into the “weather risk” phase of the marketing year, the action in the dollar takes a back seat, but after four weeks of advance and a push to the highest levels traded since December, it is a minor relief for the commodity sector to see the dollar at least hesitate for now.