Monday's late Crop Progress report seemed mostly bearish

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Outstanding condition ratings are weighing on corn futures. The USDA’s Monday afternoon Crop Progress report stated corn plantings mostly done and stated the initial condition rating for 2014 at 76% good-excellent, whereas pre-report estimates averaged about 70%. The huge production implied if summer weather cooperates depressed futures once again. July corn sank 3.75 cents to $4.6175/bushel Monday night, while December dipped 3.5 cents to $4.55.

The Crop Progress report sparked soy complex selling as well. Last week’s favorable weather enabled farmers to plant soybeans at a torrid pace, with the current completion rate at 78% topping both the five and 10-year averages for early June. That almost surely triggered new-crop CBOT sales, but doesn’t explain the bearish leadership of nearby July. One has to suspect that talk of increased imports and/or reduced exports is playing a role in the old crop losses. July soybeans fell 6.25 cents to $14.9425/bushel early Tuesday morning, while July soyoil dropped 0.21 cents to 38.10 cents/pound, and July soymeal sagged $1.3 to $504.7/ton.

The Crop Progress report sparked soy complex selling as well. Last week’s favorable weather enabled farmers to plant soybeans at a torrid pace, with the current completion rate at 78% topping both the five and 10-year averages for early June. That almost surely triggered new-crop CBOT sales, but doesn’t explain the bearish leadership of nearby July. One has to suspect that talk of increased imports and/or reduced exports is playing a role in the old crop losses. July soybeans fell 6.25 cents to $14.9425/bushel early Tuesday morning, while July soyoil dropped 0.21 cents to 38.10 cents/pound, and July soymeal sagged $1.3 to $504.7/ton.

Cattle futures showed surprising strength overnight. CME traders seemingly expect the cattle and beef complex to hold up well this week, since cattle futures built upon Monday’s modest gains last night. The rise came despite afternoon news of beef price slippage. Bulls may believe traditional early-month buying by grocers will support cash prices over the next two weeks. August cattle advanced 0.27 cents to 139.40 cents/pound as Tuesday dawned over Chicago, while December added 0.20 cents to 146.27. Meanwhile, August feeder cattle climbed 0.25 cents to 197.82 cents/pound, and October rose 0.10 to 199.00.

Monday night hog strength was surprisingly muted. CME swine futures climbed rather strongly Monday, which seemingly reflected a big midday surge in wholesale pork values. That was confirmed later in the day, while cash hog quotes posted modest gains as well. However, only the nearby June contract was able to sustain an overnight advance, thereby suggesting bullish traders aren’t very confident at this point. August hog futures actually declined 0.20 cents to 125.75 cents/pound in early Tuesday trading, and December tumbled 0.55 to 94.70.

Technical factors seemed to overrule other cotton considerations last night. The Crop Progress report indicated that U.S. cotton plantings were 74% complete Sunday. The subsequent futures advance suggests ICE traders were expecting much more progress. However, having the nearby July future smash through its 10-day moving average probably exaggerated the overnight reaction. It now looks set to test its 20-day MA. July cotton jumped 1.50 cents to 87.98 cents/pound in Monday night action, while December cotton gained 0.33 to 78.39.



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