Corn Leads Grains Higher As Plantings Disappoint

4-22-14 – Grain futures are up in overnight trading and are pulling soybeans up along with them amid rekindled concerns about the pace of planting and some short profit taking.\r\n\r\n   While “turnaround Tuesday” can account for some of the gains this morning, the bulk of the credit goes to the USDA’s National Agricultural Statistics Service report Monday afternoon showing slower-than-expected planting progress. \r\n\r\n   Some analysts had expected as much as 15% to be planted as of Sunday, but the USDA reported only 6% was in the ground, compared with the five-year average of 14%.  This is twice what it was a week ago and two percentage points above a year ago, but still was disappointing.\r\n\r\n   The effect of lackluster planting progress on overnight pricing wasn’t extreme, however, since the market generally has confidence in the ability of farmers to plant a huge amount in a short span, given the proper conditions.  And weather forecasts indicate they should have good planting weather for the next week or more.\r\n\r\n   Much of the Midwest is expected to see warm/dry conditions this week, which may raise soil temperatures enough to encourage active planting.  Deep mud also should not be a problem for most farmers, even though light rain is expected over northern and western portions of the Midwest and into the eastern Plains states.\r\n\r\n \r\n\r\nCORN SUPPORTING WHEAT\r\n\r\n \r\n\r\n   A bouncing corn market is being credited with supporting wheat prices in overnight action, although a steady conditions rating by NASS Monday afternoon is getting its fair share of attention.\r\n\r\n   NASS left its weekly wheat condition rating unchanged at 34% good to excellent, which wasn’t unexpected but still was unsettling.  And when corn’s overnight bounce is added in, market strength ensues.\r\n\r\n   Traders remain nervous about drought-stressed wheat and its eventual yield.  Hard Red Winter wheat areas of the southern Plains, which remain entrenched in severe to exceptional drought, are especially worrisome. <a href=\”\”>Your text to link…</a>\r\n\r\n \r\n\r\nBARCLAYS MAY EXIT COMMODITIES TRADING\r\n\r\n \r\n\r\n   The investment bank Barclays is expected to announce today its plans to exit commodities trading, according to the New York Times.  Increasing regulatory oversight and declining profits are being cited for their decreasing interest in commodities by several investment banks as Barclays seems set to join JP Morgan Chase and Morgan Stanley and Deutsche Bank in moving to the sidelines.\r\n\r\n   However, other investment companies and banks may take their place in the commodities business, the Times said.  These businesses see an opportunity for profits when regulations don’t apply to them.\r\n\r\n   Barclays’ move may encourage some funds to exit long positions until they see other investment firms actually participating in the market.\r\n\r\n \r\n\r\nUS, JAPAN STRUGGLE FOR BEEF TRADE AGREEMENT\r\n\r\n \r\n\r\n   The US and Japanese government remain at odds over an agreement to open the Japanese market to wider imports of US beef.  An agreement could be bullish to cattle and beef markets, but it seems traders will have to wait.\r\n\r\n   Negotiators had hoped for an agreement before US President Barack Obama flew to Japan on Thursday for trade “talks,” which often are just platforms for two leaders to sign an already-negotiated document.  However, an agreement is not ready.\r\n\r\n   Talks are said to be centered on reducing Japan’s 38.5% tariff on US beef imports.  News reports say the tariff likely will remain at or above 9%.\r\n\r\n   The USDA reported its choice beef cutout value Monday at $229.06 per cwt, up $2.71, while the select cutout rose $2.84 to $218.07.  The choice/select spread narrowed to $10.98, and there were 118 fabricated loads sold into the spot market.\r\n\r\n   The CME Feeder Cattle Index for the seven days ended Friday was $177.13, down $1.44, while the May futures contract settled Monday at $178.10, up $0.05.  April live cattle settled Monday at $143.45, down $0.75.\r\n\r\n \r\n\r\nIN OUR OPINION\r\n\r\n \r\n\r\n–There is pent-up grilling demand from a late spring that could boost sales of steaks, hamburger, pork chops and chicken in May.\r\n\r\n–Equities trade awaiting US housing reports and flash PMIs Wednesday for US, Europe and China.  Trading likely will be more decisive on Wednesday.\r\n\r\n–Corn planting actually is ahead of NASS estimates.\r\n\r\n–There are signs of a near-term top in cash cattle markets.