Corn: Corn futures gapped higher on the open, but the market was unable to sustain early gains. Futures ultimately settled around a dime off their highs with gains of 1 to 2 ¼ cents. Yesterday, USDA reported that just 67% of the U.S. corn crop had been planted as of Sunday, easily a record slow pace and adding to ideas that we’re headed for a big year-over-year drop in production. Based on March intentions, that implies that more than 30.6 million acres had yet to be planted as of early June. And there is concern about what crops have been planted, given waterlogged soils. USDA will release its first condition rating of the season next week, but if Iowa is any indication, some poor ratings may lie ahead. Statisticians in the state said that just 51% of the crop was in “good” to “excellent” condition. That compares to 81% last year at this time. Meanwhile, concerns about the U.S. supply of corn and shipping disruptions and costs have reportedly prompted some users to import corn from South America (see “Evening Report.”)
Soybeans: Nearby soybeans closed up around a penny today and finished near their daily lows after hitting a six-week high in overnight trading. The soybean market continues to see scant selling interest due to U.S. planting that has been severely slowed by rains. USDA said Monday afternoon producers were only able to advance planting 10%, to 39% complete, as of Sunday, which was 3% slower than expected. Based on farmer intentions in March, that implies more than 50 million acres that have yet to be seeded. The pace is now the slowest on record. Only 19% of the soybean crop has emerged, compared with a five-year average of 56%. It’s very likely the large speculative “funds” still hold a net short futures position. That’s read as bullish at present, because those shorts are likely to be forced to bail out and buy back their positions on another leg up in futures prices. Pro Farmer consultant Michael Cordonnier estimates lower planted acres and yields will push production down into a range of 3.6 billion bu. to 3.8 billion bushels
Wheat: SRW wheat futures closed 10 ¼ to 12 ½ cents lower, with HRW futures leading lower with losses of 15 to 18 ¼ cents. Spring wheat futures fell ½ cent to 3 cents. All contracts closed near their session lows. Wheat prices fell on forecasts for stress-reviving rains for Russia and better-than-expected USDA crop condition reports for both U.S. spring and winter wheat crops. Forecasts suggest the blocking ridge is breaking down over Russia and Ukraine over the next week and allowing for better rains and cooler temperatures and some crop improvement. Better rain is also forecast for western Australia and parts of the Canadian Prairies. Despite fears heavy rain could threaten U.S. wheat, the USDA gave a more positive picture of U.S. crops on Monday and that is the main negative factor ahead of the next update on production on June 11.
Cotton: July cotton closed down 43 points today and December futures lost 81 points. Prices finished near their daily lows. Technical selling pressure was featured in cotton today as the charts still favor the bearish camp. Cotton traders appeared to ignore a big rally in the U.S. stock market today, apparently preferring to focus on the fact the U.S. stock indexes hit three-month lows Monday and are still trending lower. The recent big slide in the crude oil futures market is also a negative outside market force for the cotton futures market. West Texas continues to receive frequent rains and weather watchers are calling for some relief from heat and dryness in the Southeast this week, which bolsters already high expectations for the 2019 U.S. crop. Traders are anticipating bigger crop pegs and smaller export forecasts from USDA going forward.
Hogs: July lean hogs closed up $1.10 today, while the August contract gained 77 1/2 cents. Both contracts hit nearly three-month lows on Monday and saw some short covering today. Today’s gains were tepid considering recent strong selling pressure that stems in part from trade uncertainty between the U.S. and Mexico and the U.S. and China. The national cash hog price slumped 39 cents on Monday, led by a 78-cent drop reported in Iowa/Minnesota. Counter-seasonal weakness remains a negative factor for hogs unless the cash market begins to show some strength. Fresh pork cutout values fell $1.14 today, led by solid losses in bellies. Movement was decent at 242.01 loads. Falling cash hog prices have pulled pork packer margins back into the black. Cash prices typically climb seasonally during June, but packer demand so far has not been strong enough to push up prices.
Cattle: August live cattle futures rose $1.25 to close at $104.05, while August feeders jumped $3.95 to close at $137.45. Feeders cattle futures, which led the way down, are doing the same on the upside, adding more than $3 today. That helped to support gains of 80 cents to $1.50 in live cattle. Much of that strength in feeders reflected a failure by corn to sustain strong overnight gains or move to new swing highs in the face of further delays in planting and emergence. Packer margins are estimated at $172.45 today, up from $166.90 a week ago, according to HedgersEdge.com. It looks like packers will have their strongest monthly profits for this year. Beef cutout values rose Monday and continued higher at midday today, which is a positive sign going forward. Very light negotiated cash cattle trade was reported about $2 to $3 lower Monday, with some still looking for steady to better by the time most cattle trade this week. Rallies are likely to remain tepid amid ongoing concerns that U.S. tariffs on Mexican goods will prompt the country to retaliate against U.S. beef and other ag products.