Morning Comments 5/31/2013Friday, May 31, 2013, 7:57 am
Submitted by: Kyle Lehman
Our markets look to be mixed today, flirting with both sides of yesterday’s close. Crop progress yesterday afternoon showed US corn plantings at 28% complete, the slowest pace on record. The corn market was stronger yesterday on ideas that the weather system moving in this weekend will be an active one – now expected to bring 1-3” of rain to most of the Corn Belt. This caused the funds to be buyers yesterday which helps explain the sharp move higher.
For today… all eyes are on the weather, wondering if the system will weaken or strengthen or speed up or slow down. Anything to get a better handle on the amount of corn being planted. The one thing you can count on though is that the farmers whose fields are ready to go will be going hard. Changes in the planting window will direct the funds and as we saw yesterday the fund money can come in (and out) in a hurry.
It was a relatively quiet night last night as the trade patiently waits for the 11am USDA Supply & Demand report. The corn market is coming under a little pressure on updated weather maps showing next week to be drier and warmer than thought yesterday. For us here in Iowa – all eyes are on the rain chances for next Wednesday which currently look to be small and spotty. For the producers that miss that rain, it looks like a nice planting window will open up.
The outside markets are a mixed/bearish input this morning. The equity markets are trading higher but the $US is also higher, helping push energies and metals lower.
Our markets were higher overnight following the weekly planting progress report that showed corn only 12% planted versus trade expectations of 15-20% planted. Traders are already questioning the data (of course). This pace is the slowest since 1984 – but it can change in a hurry. Last year, for example, Iowa planted 61% of its corn crop in one week!
The weather forecast looks a little drier for next week which is keeping somewhat of a lid on the corn market. The funds were big sellers of corn yesterday (and eventually soybeans too) and if they are in “selling mode” again today, our markets could turn over quickly. Generally speaking, soybean futures are seeing strength coming from the nearby cash market. A good percentage of domestic crushers are still holding onto decent margins, keeping spreads and basis firm.
|May 2, 2013. Western, IA raingage|