Grains, Soybeans Lower As Planting Fears Ease

4-30-14 – Grain and soybean markets are lower in overnight trading as traders take profits and fears over planting delays subside for the moment.\r\n\r\n   As El Nino continues to build in the Pacific Ocean, summer drought concerns fade, and some meteorologists now look for good rain in July.  If accurate, a late planting date may be beneficial as long as an early freeze can be avoided.\r\n\r\n   Prices are meeting support from expectations weekly export inspections will be friendly.  Gulf corn prices have been very competitive with other exporters, although this may not last as South American prices decline with the advancing harvest.\r\n\r\n \r\n\r\nKANSAS WHEAT ESTIMATES DOWN FROM LAST YEAR\r\n\r\n \r\n\r\n   The annual Wheat Quality Council Kansas Wheat Tour got started Tuesday, and first-day results were not encouraging.  Crop scouts found wheat in central and northwest counties in worse shape than last year, with more noticeable declines the farther west they traveled.\r\n\r\n   Estimates so far showed an average yield of 34.7 bushels an acre, down from the 43.8-bushel estimate for the same area last year.\r\n\r\n   But the fact that US Hard Red Winter wheat is struggling with a third year of drought is well known, and crops in Europe and Russia are said to be in good shape.  More-than-adequate supply prospects in other parts of the world are limiting price advances.\r\n\r\n \r\n\r\nRABOBANK INCREASES AGRICULTURE PRICE ESTIMATES\r\n\r\n \r\n\r\n   Economists at Rabobank Tuesday upgraded price forecasts for 2014 grain and soybeans, which may have something to do with speculative support in overnight trading. \r\n\r\n   However, the bank was cautious with its projections, saying increased volatility also was evident as weather extremes bounced around the globe and the Ukraine crisis dragged on.\r\n\r\n   Rabobank economists added their latest projections of higher average prices did not change earlier predictions of lower prices into the end of the year.  Weather and political uncertainties just delayed the onset of the decline.\r\n\r\n \r\n\r\nCATTLE SOFTER WITH GRAINS\r\n\r\n \r\n\r\n   The general risk-off attitude among traders overnight is spilling over into cattle markets.  Prices are down as April expires today.  June looks to take over as the lead month at a significant discount to last week’s cash trade of $145 to $146 per cwt on a live basis.\r\n\r\n   The discount could attract bullish investors since consumers are showing a willingness to pay more for beef, pork and chicken to get more protein in their diets.  However, projections for increased slaughter this summer could drag on cash markets amid ideas June futures are closer to what the cash market really will be at that time.\r\n\r\n   Slaughter so far this week is above last week at 234,000 head, compared with 219,000 last week but remains behind last year’s 244,000. \r\n\r\n   Boxed-beef prices were mixed Tuesday.  The USDA reported its choice cutout value up $1.36 per cwt at $234.36 while the select cutout was off $1.15 at $220.42. \r\n\r\n   The CME Feeder Cattle Index for the seven days ended Monday was $179.59, up $0.73, while the May futures contract settled Tuesday at $180.57, down $0.52.  April live cattle settled at $145.50, up $0.10.\r\n\r\n \r\n\r\nIN OUR OPINION\r\n\r\n \r\n\r\n–Technically oriented funds are buying as fundamental worries about Ukraine by other traders trigger pre-positioned buy points.\r\n\r\n–Cold weather and a delayed start to the grilling season is likely to exacerbate summer beef price pressure caused by increased slaughter.\r\n\r\n–The back-and-forth struggle over Ukraine with its various sanctions will become an issue going forward, most likely centered on gas and oil, but could have a ripple effect into other arenas.\r\n\r\n–Cattle futures appear to be confined to a sideways trading range and pulled away from the top of the range Tuesday.