CORN:
The big surprise to traders in last week’s WASDE report for corn was how little USDA trimmed the US corn carryover, and that they left the Argentina corn crop estimates unchanged. Traders were looking for 2.102 billion bushels for corn carry, and USDA came out with 2.122 billion bushels. Argentina corn crop estimates have been steadily cut by private firms (as well as the grain exchanges) seeing much less corn potential now due to widespread disease. For now, attention turns to the US crops and weather, along with geopolitical instability.
- Corn is following the crude oil market closely with Middle East tension rising.
- Big temperature swings in the US Midwest over the next ten days.
- Areas of extended dryness will be closely watched with rain chances in the forecast.
- Sideways trading range as traders monitor US spring planting and weather conditions.
SOYBEANS:
The USDA report last Thursday left traders scratching their heads on the Brazilian soybean crop estimate. The USDA number is now WELL above all private and CONAB estimates for this crop. The average trade guess for the report was 151.68 MMT, and the USDA estimate was unchanged at 155 MMT. This larger Brazilian estimate then carried over to a larger than anticipated world carryover as well. Traders’ average guess on global soybean carryover was 113.71 MMT, and USDA estimated it at 114.22 MMT. It appears the trade suspects USDA data is overestimated and will shift their focus to the US crop production and weather now.
- Soybeans are following energy markets with Middle East tension rising.
- Rain in forecast for next 10 days in US Midwest, will be watched close.
- Traders will be watching the planting progress as the season kicks off.
- NOPA US crush data for March was a new record at 196.406 mln bu.
WHEAT:
War in the Middle East is expanding concerns for world wheat, with additional war threat in the world, besides the ongoing Ukraine and Russia conflict. The US dollar is reacting to the impact of geopolitical war. Then we have concerns for the US wheat crop with extremely dry conditions in the Southern Plain states.
- Russia is holding departure of some private vessels loaded with wheat, giving the impression of shorter wheat export business out of Russia.
- Extremely hot temperatures were seen across the central US and Southern Plain states over the weekend, further stressing the wheat crop.
- Cooler temperatures and some rains in forecast over the next 10 days for most areas.
- A higher US dollar adds downside pressure to wheat futures.
CATTLE:
The bird flu headlines in “dairy” cattle seemed to subside over the last week, allowing fed cattle futures to stabilize. This over hyped bird flu story successfully dropped fed cattle prices for three straight weeks. But futures prices fell much more than the actual cash market did, indicating the smaller cattle numbers are still supporting this market.
- Choice boxed beef prices jumped $2.20 last week and Select rose .39 cents.
- The historically low cattle herd situation continues to support this market.
- Commodity trading funds exited 16,000 contracts of live cattle futures in the last week.
- The Memorial Day holiday and kickoff to summer grilling season is weeks away and retailers will be building up supplies in anticipation.
HOGS:
Lean hog futures were caught in the price drop wave that started in the stock market last week, after inflation data was released. This on the heels of a relentless bull market in lean hog futures since the first of the year, that didn’t appear to have a breaking point. The wave of selling was widespread across the commodity markets in general.
- The cash market and pork demand continue to support this market.
- Concerns about the economy and inflation are a threat to sustaining higher prices.
- USDA raised pork exports by 210 million pounds.
- Commodity trading funds increased their net long position in lean hog futures, adding 15,803 contracts last week.
Give us a call for more information on our consulting and advisory services offered at Bullpen Trading LLC, for all levels of agribusinesses. 507-424-6339
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