Rain Delays Early Planting

4-1-14 – Much of the southern Plains and the western Midwest have seen rain overnight, and much of the central and southern Midwest are expected to receive rain today.\r\n\r\n   The National Weather Service is even predicting severe storms in eastern Kansas and western Missouri with flash flooding possible in a band across Missouri, Illinois and into Ohio. http://www.hpc.ncep.noaa.gov/noaa/noaad1.gif  Severe thunderstorms also are possible in a patch that straddles the Texas/Oklahoma border. \r\n\r\n   That rain, along with the snow and ice that haven’t melted yet in the Northern Midwest, likely will delay spring planting even more and push futures prices higher as worries about a late season mount.\r\n\r\n   Temperatures also are expected to remain below normal, frustrating even farmers without soggy fields as they await soil temperatures that are warm enough to plant.\r\n\r\n \r\n\r\nCORN LOWER OVERNIGHT AS FARMERS SELL\r\n\r\n \r\n\r\n   Corn futures are lower in overnight trading as farmers take the advice of market analysts and sell more corn.  Many have already sold their old-crop supplies, but many of those who haven’t were reportedly enticed by prices over $5.00 a bushel.\r\n\r\n   Funds were thought to be heavy buyers of futures contracts on Tuesday, and farmer selling was reported on the rally. \r\n\r\n   US corn export inspections are gaining speed as soybean exports decline and clear the way at the ports for corn to be loaded.  US corn exports have remained strong, and may even exceed the latest USDA estimates, because the US is seen as a stable supplier amid the conflict and uncertainty surrounding Ukrainian supplies.\r\n\r\n   That could change soon, however, as South America gains prominence with their new-crop supplies.  And if Ukraine, which hasn’t missed a shipment through the recent political turmoil, regains world confidence, its supplies, combined with those of Brazil and Argentina may limit US sales in summer months.\r\n\r\n \r\n\r\nWHEAT DROPS WITH THE RAIN\r\n\r\n \r\n\r\n   Rain in winter wheat regions of the Plains and Midwest is adding pressure to Chicago and Kansas City markets in overnight trading.  Long profit taking and stop-loss selling also may be involved since nearby futures contracts have dropped below key moving averages.\r\n\r\n   Little in the way of bullish fundamental news was reported Tuesday, and since the markets had turned away from two-month cycle highs last week, there was nothing to feed the bull.  Fund liquidation was reported Tuesday and apparently continues overnight.\r\n\r\n   Yet some traders with longer-term outlooks remain bullish wheat, especially Hard Red Winter wheat, since the National Oceanic and Atmospheric Administration’s drought monitor http://droughtmonitor.unl.edu/data/pngs/20140325/20140325_usdm_home.png still shows extreme to exceptional drought in major growing areas of the Plains.  And the latest rain forecasts leave out a good chunk of this area, this week’s wetter weather may not help much.\r\n\r\n \r\n\r\nCATTLE GAIN SHORT-COVERING SUPPORT\r\n\r\n \r\n\r\n   Live cattle futures are up in overnight trading, recovering from Tuesday’s losses, on speculative short covering despite lower USDA beef cutout values.  April futures remain below last week’s cash trade and could lend pressure to this week’s action in the Plains.\r\n\r\n   No bids were reported this week, but asking levels were around $153 per cwt on a live basis and $246 dressed.\r\n\r\n   The USDA reported its choice cutout value down $1.25 per cwt at $232.54 and select down $2.06 at $222.95.\r\n\r\n   Weekly slaughter was 118,000 head, unchanged from a week ago but down slightly from 120,000 a year ago.\r\n\r\n   The CME Feeder Cattle Index for the seven days ended Monday was $177.71, up $0.11 while the April futures contract settled Tuesday at $176.45, down $0.57.\r\n\r\n \r\n\r\nIN OUR OPINION\r\n\r\n \r\n\r\n–South Korea plans to allow certain, specified levels of Zilmax in imports of US beef, but major packers aren’t killing treated cattle because of health concerns.\r\n\r\n–Russia’s ban on Australian beef imports for the growth promotant trenbolone won’t help US exports since Russia already bans most US meats for ractopamine use.\r\n\r\n–Near-term cattle momentum appears bearish.\r\n\r\n–Technical cattle traders keeping cattle in a sideways pattern for now.