GRAIN CALLS
Corn: 6 to 10 cents lower.
Soybeans: 8 to 12 cents lower.
Wheat: SRW 10 to 15 cents lower; HRW 4 to 8 cents lower; HRS steady to 2 cents higher.
GENERAL COMMENTS: Corn, soybeans and winter wheat futures faced solid selling pressure overnight, while spring wheat traded modestly higher. We expect followthrough selling during early daytime trading, which could pull spring wheat lower. Outside markets are negative with crude oil futures around 50 cents lower and the U.S. dollar index more than 300 points higher.
USDA reported old-crop corn sales cancellations of 272,000 MT to China.
USDA reported corn planting was 49% completed as of Sunday, seven points ahead of the five-year average. Soybean planting reached 35%, 14 points ahead of average for the first week of May. Spring wheat planting stood at 24% done versus the five-year average of 38% for the date. Planting delays and concerns remain in the northern states, while other states are rapidly advancing.
USDA raised its “good” to “excellent” rating for the U.S. winter wheat crop by one point to 29%. But the portion of crop rated “poor” to “very poor” increased two points to 44%. On the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop dropped another 5.8 points to a historically low 237.0. The SRW crop rose 1.7 points to 375.9, which was an above-average rating for the first week of May.
China imported 7.26 MMT of soybeans during April, up 0.6% from March but down 9.8% from last year and well shy of the 9 MMT traders expected, as new customs procedures delayed the unloading of cargoes. Through the first four months of this year, China imported 30.29 MMT of soybeans, up 6.8% from the same period last year.
Statistics Canada reported Canadian wheat stocks at 13.3 MMT, up 18.2% from year-ago but lower than the average pre-report estimate of 14.0 MMT. Canola stocks stood at 5.9 MMT, up 15.3% from last year but lower than the 6.9 MMT expected.
Crop consultant Dr. Michael Cordonnier raised his Brazilian soybean crop estimate 1 MMT to 154 MMT. He also raised his Brazilian corn crop estimate 1 MMT to 124 MMT, despite some safrinha corn areas starting to turn drier.
CORN: July corn futures dropped below the 5- and 10-day moving averages overnight after failing to clear $6.00 on Monday. Near-term resistance is layered from $5.85 to last week’s low at $5.69 1/4. Near-term resistance is at $6.00 and then the 20-day moving average at $6.08.
SOYBEANS: July soybean futures dropped below the 5-day moving average overnight after being turned back at the 20-day average on Monday. Near-term trading boundaries extend from last week’s low at $13.92 1/4 to Monday’s high at $14.46 3/4.
WHEAT: July HRW wheat futures posted an inside day down overnight following four straight days of strong corrective gains. Near-term support is the 100-day moving average at $8.34 1/4. Monday’s high at $8.59 1/4 is initial resistance, followed by the 200-day average at $8.68 1/2.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/lower.
CATTLE: Live cattle futures are expected to open with a mostly firmer tone this morning, though we doubt buyer interest will be too strong. The average cash cattle price dropped $3.22 to $173.93 last week, the third straight weekly decline totaling $6.51 and are expected to be lower again this week. But front-month June live cattle futures finished Monday $11.505 below last week’s average cash price. Given the tight market-ready supply situation, that’s a pessimistic stance. Wholesale beef prices dropped on Monday, with Choice down 63 cents and Select $3.04 lower. Packers moved only 78 loads of product on the day. With Choice beef still solidly above $300.00, retailers are being selective buyers ahead of what’s traditionally a very strong demand period for beef. Technically, June live cattle futures have formed a bear flag on the daily chart, making it critical bulls defend support at last week’s low or there is likely to be a deeper price pullback.
HOGS: Lean hog futures are expected to open with a mostly lower tone. The path of least resistance remains down and traders are showing no signs of halting the selloff. The CME lean hog index is down 12 cents to $74.42 (as of May 5), ending the recent string of price strength. While the expiring May contract finished modestly firmer on Monday, traders continued to narrow premiums in summer-month contracts. As of yesterday’s close, the premium June hogs held to today’s cash quote fell to $8.88. The pork cutout value firmed 7 cents on Monday, though it showed stronger gains during morning trade. Movement was a modest 250.5 loads for the day.