Grain and Livestock Market Recap

Miss our interview with RFD-TV this morning?  

Watch it here: Corn and Wheat Gain Back Some Lost Ground – Blue Line Futures

Today’s Headlines

Crop Progress

• Corn- 5% planted, an advance of 2% from last week but 1% behind the average estimate.  The range of estimates was 5-9%.  The average pace for this time of year is 4%.

• Soybeans- In the first report of the year for soybeans, the USDA showed soybean planting at 6% planted.  The range of estimates was 1-3%.  The average for this time of year is 2%.

• Spring Wheat- 6% planted, the range of estimates was 5-7%. The average pace for this time of year is 7%.

• Winter Wheat –  Good to excellent conditions were reported at 34%.  The range of estimates was 35-38%

Brazil Soybean Harvest 

• AgRural reported that Brazil’s soybean harvest had reached to 87% through last Thursday to match the five-year average pace

Weekly Export Inspections

• Weekly corn export inspections of 70 million bushels were down 13% from last week but still comfortably within pre-report estimates and keep year-to-date corn inspections 34% ahead of last year’s pace. 

• Soybean inspections at 30 mb were within expectations and cumulative inspections are still 25% behind the year-ago pace. 

• Wheat export inspections of 11.8 mb were down 6.5% from the week prior. Cumulative wheat inspections are running 15% ahead of last year’s pace.

Grain and Oilseeds Price Action Wrapup

CORN

Corn prices reached 4 to 5 cent gains around midday but faded ahead of the close to end the day mixed. There’s a good chance that the past few weeks of downside movement is becoming exhausted, but funds are shedding a big chunk of their length and it’s early to worry about weather issues. With futures gravitating towards support, short-term value to the long side might be growing ahead of potential summer volatility as acreage totals are being questioned due to high input costs. Look for buying opportunities if July corn drifts into the $4.40 to $4.48 zone.

SOYBEANS

It was impressive last week when soybeans were quick to recover from a fresh low despite heavy outside market weakness.  Today that was a different story with new highs for the move posted in the overnight trade that turned to weakness and eventually a close near the lows of the session.  Today’s double-digit losses didn’t come with a major news story or anything, so it’s clear traders are content seeing bean prices maintain their choppy bias for now. It looks like a rally above $12.00 in the July soybean contract presents a selling opportunity in the short-term.

WHEAT

Wheat prices erupted to double-digit gains with some war premium entering the mix again but mostly due to dry weather concerns that are gaining traction. Drought conditions are expanding and western Kansas is missing meaningful moisture. Kansas City wheat rallied to gains of more than 20 cents before cutting into the rally ahead of the close. Wheat prices slipped heavily in the second half of last week and it has been difficult to keep the focus on weather concerns. Use short-term strength if you’ve been thinking about adding downside protection lately and feel like you might have missed an opportunity.

CATTLE

Live cattle prices spent the first hour this morning with $1.00 gains in front month contracts before leaking to small losses for the rest of the session. Cash cattle markets ended last week with big strength, again limiting new selling interest in the futures market. May feeder cattle threatened to give up early gains as well but managed a strong close of $1.00 to $1.50 in front month contracts, again notching fresh highs for the latest rally. May feeders finally closed their gap left open on the chart since mid-October with a move above the $373.20 area. Ongoing cash market strength makes it difficult to expect a high has been reached.

HOGS

Hog contracts spent much of the day holding losses of 50 to 80 cents and extending recent weakness to their lowest levels traded since late-December. Key support is drawing closer within the $101 to $102 area. June hogs need to hold that area, otherwise a breach of the 200-day moving average could spark big fund long liquidation. Considering ongoing strength in the cattle markets, I expect buyers will be looking to jump in on the long side of the hog market soon. This can be a good low-risk trade because you know where to put stop orders right below key support.