Weather concerns lift futures... Wheat futures surged amid weather concerns overnight, with the HRW wheat market leading to the upside with gains of 9 to 14 cents. SRW is up 7 to 10 cents, while HRS wheat is up 6 to 8 cents. Corn futures also rallied on weather concerns overnight, with most contracts up 4 to 5 cents. Soybeans are 5 to 8 cents higher. The U.S. dollar index is marginally higher, while crude oil futures are down slightly.
Freezing temps and flooding bolsters markets... Temperatures dropped below freezing in Kansas, Oklahoma, the Texas Panhandle and Colorado over the weekend. Plus the winter wheat crop is more advanced than normal, with 32% of the crop headed as of last Sunday, leaving it more at risk of damage. But snowfall accompanied the cold blast, which should protect against widespread damage. However, World Weather Inc. notes that ongoing wet weather could lead to disease concerns. Meanwhile, storms over the weekend resulted in major to record flooding from eastern Oklahoma through northern Arkansas, Missouri, southern Illinois and into central Indiana, according to the National Weather Service. Drier weather is expected this week, but it will take time for fields to dry out enough for a resumption of planting.
Congress reaches budget deal without cotton and dairy farm bill language... Lawmakers reached a budget agreement for the remaining months of fiscal year 2017, which ends Sept. 30. Cotton and dairy farm program language did not make it in the final budget package. Instead, included in a list of congressional directives accompanying the spending deal is a request that the USDA secretary within 60 days issue a report on administrative options for providing financial relief to cotton growers, and also offer immediate assistance to dairy producers. The omission of cotton and dairy language was because Sen. Patrick Leahy (D-Vt.) did not agree with the dairy plan worked out by Representative Collin Peterson (D-Minn.) and House Ag Chairman Mike Conaway (R-Texas). Sources say this does not bode well for coming farm bill debate.
Hearing on Branstad, FOMC meeting and jobs report some highlights of the week... This week the Senate will hold the nomination hearing for Iowa Governor Terry Branstad to be the U.S. Ambassador to China, with other sessions on broadband infrastructure, the economy and private-sector growth and flood insurance. The Senate will also consider the nomination of President Donald Trump’s pick for the Securities & Exchange (SEC) chairman. On May 6, the Senate Agriculture Committee heads to Michigan for a farm bill hearing. At the White House, Trump will meet with Palestinian Authority President Mahmoud Abbas on Wednesday and Australian Prime Minister Malcolm Turnbull on Thursday. The Federal Open Market Committee (FOMC) will meet May 2-3. No change in interest rate policy is expected at the meeting. The April jobs report will arrive Friday
Perdue to provide more school meal flexibility... USDA Secretary Sonny Perdue will unveil an interim rule today designed at providing flexibility for school meals. He will make the announcement at Catoctin Elementary School in Leesburg, Virginia. Senator Pat Roberts (R-Kan.) will also be in attendance. The former Obama administration’s rules -- which require strict calorie limits; the near-elimination of salt; multiple servings of raw vegetables, fruits, and whole grains; tight restrictions on meat and fat, and bans on everything from vending-machine sweets to bake sales -- were meant to combat childhood obesity when they were imposed in 2012.
Commitments of Traders data shows record-setting bearish attitudes among funds... When combining corn, winter and spring wheat, soybeans, soyoil and soymeal futures, hedge funds and other money managers held an all-time record net short position of 464,376 futures and options contracts the week ended April 25, according to Commodity Futures Trading Commission data. This also marks the first time ever when money managers were bearish on all seven of these contracts at the same time. The overwhelming bearish sentiment signals a corrective rally is likely ahead.
June futures take over lead-month status at sharp discount to cash... While momentum is clearly to the upside, the live and feeder cattle futures are severely overbought. On the other hand, June live cattle, which are now the new front month, are at least $11 below the low end of last week’s cash action. And with dressed cattle weighs on the decline, marketings are clearly current. Further, wintry weather on the Plains this weekend stressed livestock.
Watching the cash hog market after last week’s strong technical performance... Last week’s V-bottom favors followthrough buying in the lean hog market. But unless cash prices strengthen, momentum could soon fade, leaving the market as risk of profit-taking. While there were some firmer cash hog bids at times last week, the cash hog index remains in a pronounced downtrend.
Weekend demand news... There is no business to report.
Today’s reports:
- 8:00 a.m., Commodity Costs and Returns -- ERS
- 10:00 a.m., Weekly Export Inspections -- AMS
- 2:00 p.m., Cotton System -- NASS
- 2:00 p.m., Fats & Oils -- NASS
- 2:00 p.m., Flour Milling -- NASS
- 2:00 p.m., Flour Milling - Ann. -- NASS
- 2:00 p.m., Grain Crushings -- NASS
- 3:00 p.m., Crop Progress -- NASS
