Grain, Soybeans Mixed As Report Fever Wears Off

Grain and soybean futures prices are mixed in overnight trading now that the March Stocks and Planting Intentions reports are history.  Traders are turning almost exclusively to weather as a driving force in grain markets.\r\n   Ultimately, nearly everything from now until Thanksgiving revolves around the harvest.  How much is planted.  How much rain it gets.  What summer heat is like.  When crops pollinate.  Possible insect damage.  The list goes on, all factors that affect the harvest.\r\n   The latest in-motion map from the National Oceanic and Atmospheric Administration shows a winter storm sweeping out of Wyoming and Montana into the Dakotas and then swinging northeast into Canada via Minnesota.  Rain and snow also form ahead of a cold front associated with the low and sweep through the Midwest and portions of some southern states.\r\n\r\nFEW FIREWORKS FROM USDA REPORTS\r\n\r\n   Despite their billing, Monday’s USDA reports did not provide agricultural commodity markets with many fireworks.\r\n   In the Planting Intentions report, the reported acreage designated for corn was seen as somewhat bullish, in that it came in slightly below trader expectations.  Some analysts wondered why the USDA left potential corn acres from last year’s prevent-plant acreage unaccounted for, and many think the eventual acreage will end up being higher.\r\n   Corn stocks in USDA’s report were well above last year, although a bit lower than some expected.\r\n   Monday’s corn price jump above the round figure of $5.00 a bushel may entice some farmer selling to pressure interior basis levels.\r\n   Since corn acres were below expectations, soybean acres were slightly above trade guesses.  However, if corn acres eventually rise from this report, as some expect, then soybean acres could decline.\r\n   Wheat acreage was a bit below trade estimates, but since stocks were higher than anticipated, the trade will now turn to weather for price direction, and the latest reports show crop conditions in Kansas continuing to decline although those in Texas and Oklahoma are holding better.\r\n\r\nINTEREST RATES SEEN LOW LONGER THAN EXPECTED\r\n\r\n   Farmers should get some help in that interest rates are expected to remain low into 2015.  Federal Reserve chairwoman Janet Yellen Monday commented in a speech that the US economy still requires low interest rates, even though direct stimulus through the Fed’s asset-purchasing program is winding down.\r\n   Yellen’s comments are supporting stock markets, and the US Dollar is near steady.  Her comments helped ease concerns she generated after the last Federal Open Market Committee meeting that interest rates might begin rising sooner than many expected. \r\n\r\nCATTLE PRESSURED BY LOWER HOGS\r\n\r\n   Live cattle futures are struggling against lower lean hog futures after sliding in direct response to lower prices in hogs following the bearlishly construed Quarterly Hogs and Pigs report.\r\n   Cattle futures also are working to hold the line against ideas fed cattle supplies will be larger into the summer months.  April futures also are below last week’s cash trade and could lend pressure to this week’s action in the Plains.\r\n   Plus, this week’s feedlot showlists are up from last week, providing packer buyers with more incentive to hold to lower bids this week.\r\n   Wholesale beef prices slid on Monday, with the USDA reporting its choice cutout value down $0.67 per cwt at $233.79 and its select cutout down $2.33 at $225.01.  Last week, choice was down $5.70, and select was off $6.32.\r\n   Weekly slaughter was 114,000 head versus 115,000 the previous week and last year’s 108,000.\r\n   The CME Feeder Cattle Index for the seven days ended Friday was $177.60, down $0.95 while the April futures contract settled Monday at $177.02, down $1.32.\r\n\r\nIN OUR OPINION\r\n\r\n–The Russia/Ukraine/Crimea crisis may be off the front pages, but traders still are wary as spring planting gets under way.\r\n–Western sanctions and International Monetary Fund austerity demands could hurt Ukrainian and Russian plantings as interest rates soar.\r\n–China’s economy bears watching as housing prices fall, and the manufacturing PMI comes in at 48, the lowest since July 2013.  It could affect their buying ability.\r\n–US logistical problems have not gone away as continued wintry weather in northern reaches keeps rivers, roads and railroads locked in.\r\n