Corn Planting Progress Near Worrisome

4-15-14 – US corn planting progress is running at the ragged edge of worrisome.\r\n\r\n   The USDA’s National Agricultural Statistics Service Monday issued its first planting progress report of the season, and it came in at 3% complete.  That was at the lower end of trader expectations yet slightly above last year’s 2% and was behind, but within striking distance of, the 6% average.\r\n\r\n   Weather forecasts suggest some progress will be made this week in the Delta and southern Midwest, but cold, wet weather likely will keep planters idled farther north.  Traders know, though, that US farmers can get a lot of fieldwork done in short order given the right conditions, and this is keeping a lid on price advances.\r\n\r\n \r\n\r\nUKRAINE CRISIS ON HOLD\r\n\r\n \r\n\r\n   Market jitters are being eased slightly in overnight trading as political unrest in Ukraine has not boiled over into large-scale conflict.  A deadline for pro-Russian protestors to clear out of government buildings in eastern Ukrainian provinces passed Monday with less show of force than traders had feared.\r\n\r\n   Part of the reluctance by acting Ukrainian president Oleksander Turchynov to remove the protestors immediately and forcefully may have been the show of force that the well-armed protestors put on themselves at these buildings.  Part of it also may have been the massive Russian troop buildup along the border with Ukraine.\r\n\r\n   US President Barack Obama spoke with Russian President Vladimir Putin by telephone Monday, urging him to refrain from military intervention or face even stricter economic sanctions.  In turn, Putin urged Obama to encourage Turchynov to not use force against the protestors.\r\n\r\n   In spite of whatever urging Obama may have done with Turchynov, the interim president says he has begun a careful dissection of protestors from government buildings.  \r\n\r\n \r\n\r\nWHEAT VULNERABLE TO COLD\r\n\r\n \r\n\r\n   NASS reported Monday that 5% of the US winter wheat had headed, compared with 4% last year at this time.  The crop’s condition also declined nationally from last week to 34% good to excellent from 35%, and remains below last year’s 36%.\r\n\r\n   But with the crop heading, it is more vulnerable to freezing temperatures.  The National Weather Service has a freeze warning in effect for large portions of the central US with a hard freeze warning in place in Hard Red Winter wheat country for the second straight day.\r\n\r\n   Any freeze damage that occurs from the latest round of frosty weather will only add to the drought stress and winter kill that occurred earlier.  Some believe the major damage from this incident will be leaf burn and that the harshest temperatures were confined to a few areas of western Texas.  Continued drought is more of an issue for final yield.\r\n\r\n \r\n\r\nCASH CATTLE, FUTURES CLOSING PRICE GAP\r\n\r\n \r\n\r\n   Cash cattle prices remain above April contracts, and futures continue to move higher in an effort to close the gap.  Cash cattle traded last week at $147 per cwt on a live basis, down $1 to $3 from the previous week and at $240 to $243 dressed, which was up $1 to $2.\r\n\r\n   Cattle futures were thought to have blindly followed lean hogs lower after the USDA estimated hog numbers at higher levels than traders were estimating.  However, hog slaughter in April suggests the traders were closer to an accurate assessment of the effects of PED virus than the USDA, and traders believe both markets were oversold.\r\n\r\n   Beef prices are the highest since 1987 and are expected to retain an upward bias as supplies tighten, although economists expect shoppers to seek alternatives to many traditional purchases.\r\n\r\n   The USDA reported its choice beef cutout value Monday at $222.52 per cwt, up $0.40, and select at $212.05, down $0.41.\r\n\r\n   The CME Feeder Cattle Index for the seven days ended Friday was $180.39, up $2.09, while the April futures contract settled Monday at $180.00, up $0.50.\r\n\r\n \r\n\r\nIN OUR OPINION\r\n\r\n \r\n\r\n–As a warm patch gives way to another round of record cold, East Coast consumers likely will stay away from the grills for another week.\r\n\r\n–Cattle futures appear to have priced in expected weakness.\r\n\r\n–Beef is expected to bottom soon as the weather must warm seasonally.