GOOD MORNING! US COMMODITIES
OPENING REVIEW
Tuesday, May 21, 2013
Current Review: Corn down 7-13 cent, soybeans down 2-8 cents, wheat down 8-10 cents, oats down 5-6 cents. Cattle up 50-60 cents and hogs up 5-15 cents. If you would like opening calls via text or email, please call 1-800-247-4071. View report estimates and crop ratings online CLICK HERE. Need help marketing your grain? Ask about our personal farmer marketing program.
GRAINS: Grains are taking additional risk premium out of the market as corn planting progress was more advanced than estimated. Corn plantings were 71% complete vs 28% a week ago and79% on average. The corn planting increased 43% in the week, this is tied with the 1992 record weekly planting pace. Next week the trade will expect corn planting to be near 90% complete. The extreme wet areas remain in NE IA, SW MN, and W. Wisconsin. The government yield forecast of 158 bpa is now in line with their planting pace estimated in the May crop report. The summer weather however will be key. Weather rallies will occur but from what level. USC believes December corn is targeting $5.00/bu vs $4.99/bu a year ago in mid-June. Soybean planting progress was in line with trade estimates at 24% complete vs 71% a year ago. The wheat ratings decline 1% to 31% gd/ex. HRW wheat continues to deteriorate and the SRW is steady to improving. The spring wheat is 67% planted. Next week the trade will anticipate that 50% of the soybeans will be planted. 43% of the wheat is headed vs 80% a year ago. Wheat harvest is approaching. 19 mln acres of corn as of Sunday night are yet to be planted and 37 mln acres of soybeans. The advanced planting will mean prevent plant acres should be less than 1 mln acres. Supplies remain tight across the corn belt. Cash values continue to hold around $7.00/bu. Nebraska has corn basis levels at near $1.00/bu over July. Rumors of corn from S.A. being imported to the US continue to circulate. Brazil corn is $10/T under US values and Argentina is $32/T under US values. Of course shipping costs are more from Argentina. Seasonally September corn remains in a downtrend until July 22nd. August soybeans were a seasonal buy July 19th until July 29th. USC’s computer systems are mixed. New crop corn, oats, and wheat remain in a downtrend. Soybeans and the products are in an uptrend. This is a key day for July corn. Call for updates.
CATTLE: Cattle had a positive technical hook reversal. This is a warning sign for the bears. The cattle on feed report was mildly bearish, but with the big discounts it was already dialed in. The open interest yesterday was up 2213 contracts in August. Indicating new buying. June was down 8338 contracts which was short covering and a positive. Overall open interest was down 4615 contracts. Choice beef hit another all-time record yesterday, closing at $210.04/cwt, up 53 cents. Packer margins are a positive $83/head. The trade feels comfortable choice beef has topped and cash cattle will collapse. This however is an ideal year for a counter seasonal advance. Supplies in the 2nd and 3rd quarter are expected to be down 2% vs a year ago. Historic seasonals are negative. Cash cattle should trade steady to up $1/cwt with the positive margins. USC’s computer systems are negative but at key turn up levels. This is a key day. Call for updates.
HOGS: The hog market continues to be in a holding pattern. The futures have dialed in a premium to the cash. T his premium has now disappeared. The 2-day index is at $92.93/cwt. Seasonally the cash market should cool as the marketing hole relaxes. The cutout is at $92.23/cwt vs $89.95/cwt a week ago. Ribs yesterday was were down $4.01/cwt at $138.33/cwt. The trade finally realized that the discovered PEDV disease that causes diarrhea and vomiting in young pigs resulting in a higher death loss was a supply positive vs a demand negative. The belief is the Iowa producers will close the disease. Packer margins are a positive $8/head for vertical integrators. USC’s computer systems are negative all the months except June and July. Seasonals remain negative.
ENERGY: Oil is trading near $96.50/barrel. Oil prices are setting back on Tuesday ahead of API and EIA inventory numbers. Investors are waiting for the US Federal Reserve’s latest view on the US economy. On Wednesday, the Fed will release the minutes of its most recent policy meeting and look for hints on what the Fed might be preparing to do. Inventory data is expected to show draws of 1.2 mln barrels of crude oil and 200,000 barrels in gasoline. US June natural gas prices are $4.15/bcf. Forecasts are calling for average to above average temperatures, reducing air-conditioning demand. Underlying support came from Friday’s government approval of a second US LNG export terminal. Gold is trading near $1366/oz, silver $21.20/oz, platinum $1450/oz, and copper $3.37/lb. Weakness in gold and silver continues despite reports of Chinese buying overnight. Silver may be undermined by lower Chinese silver imports in April.
U.S. Commodities, Inc.
1226 Grand Avenue • Suite 200
West Des Moines, Iowa 50265
Phone: 515-222-1393
Toll Free: 800-247-4071
Fax: 515-222-0335
The ideas expressed and the data from which they are drawn are believed to be reliable but cannot be guaranteed. Please note that there is an inherent risk of loss associated with trading futures and options contracts. Futures trading may not be suitable for all recipients. Those acting on this information are responsible for their own actions
