Recent models are showing the possibility of El Nino not following the delayed breakdown but rather potentially accelerating sooner into La Nina. Commodity Weather Groups summer scorecard is maintaining the expectation of moisture for the Midwest for June – but the general temperature for the Midwest is moving slightly warmer than earlier models. August outlook is continuing its warm/dry outlook.
Corn closes higher for the third day on bargain buying and doubt over achieving the USDA planting number.
Corn traded higher on profit taking and continue inter market spreading of corn/wheat and corn/soybeans.
Cash markets continue to be quiet as farmers continue to be slow sellers following the USDA report.
Funds were reported to be buyers of 5,000 contracts tied to profit taking and unwinding of long corn / short soy spreads.
Dry weather in Brazil is helping advance harvest progress but is creating some concern for second crop corn stress.
CWG noted that average temperatures will finally inch higher after mid-April, but the cool pattern in the meantime could keep soil temperatures at least 10 days behind normal in much of the corn belt.
The USDA plans to issue its first US corn planting progress report of the year next week.
Soybeans fall on profit taking and fund selling of soy oil on lower Malaysian Palm Oil.
Soybeans fell on fund profit taking after yesterday’s posting of multi month high in soybeans and soy oil. Funds have built long positions in soybeans and soy oil and weakness from the Malaysian Palm Oil market led to day two of profit taking in both markets.
Funds were reportedly sellers of 8,000 contracts of their record large soybean oil.
Continued pressure is playing out in the soybean complex on the anticipation of US farmer switching of corn acres to soybeans – especially in the Delta and Southern US due to late progress of corn planting and the most favorable bean/corn for new crop contracts since 2014. Actual 2016 planted acres will be reported by the USDA on June 30.
Cuba purchased around 160,000 tonnes of soy meal from Argentina, US and Europe.
Wheat crop conditions come in higher than expected.
The USDA, in its first national crop progress report of the year, rated 59 percent of US winter wheat as being in good-to-excellent condition. This topped analysts’ estimates for 57.6 percent of the crop. The five-year average of 42 percent.
On the weather front, CWG noted that nearly 2/3 of the Plains hard red wheat has picked up less than half their normal rainfall in the past 30 days, leading to expanded moisture deficits. Driest area focuses in the southwest 1/3 of the belt. Wetness has been a concern and may continue to be for soft wheat in the Delta/southern Midwest going forward.
May feeder cattle lead the complex lower while lean hogs recover off technical support.
Cattle and feeder markets succumbed to fund selling despite slightly higher boxed beef prices. Tuesday negotiated cash trade was very limited on light to moderate demand in the Southern Plains and Nebraska. In Texas there were a limited amount of early live sales ranging from 131-133.
Lean hogs closed higher but well off early session highs. June lean hogs are trading at a 4.30 premium to the cash market compared to normal demonstrating the market’s belief that seasonal advances in the cash market will be stronger than normal. Traders continue to expect China to be a stronger importer this year.
Colder, wetter spring weather brings concern to the grilling market for beef and pork demand.
Closing Market Snapshot
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