Short-covering seems to be supporting the crop markets

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Short-covering may be supporting the crop markets. The monthly USDA WASDE report is due out tomorrow (6/11), which could greatly affect markets upon its release. Given the size of the decline suffered lately, it’s not terribly surprising to see old crop corn leading the way higher last night. The weekly Crop Progress report looked rather negative for new-crop corn, since the corn crop is looking very good at this point. July corn rose 3.0 cents to $4.54/bushel Monday night, while December added 2.0 cents to $4.52.

Chinese news may be supporting old crop bean and meal prices. The Crop Progress showed soybean plantings well ahead of normal and early conditions looking outstanding, which is weighing on new-crop prices. However, an overnight report indicating the latest Chinese government sale of stockpiled beans went poorly due to quality issues; that suggests they’ll be forced to continue actively importing soy and products. Asian palm weakness is once again weighing on oil. July soybeans rallied 7.0 cents to $14.64/bushel early Tuesday morning, while July soyoil sank 0.30 cents to 38.98 cents/pound, and July soymeal bounced $3.3 to $485.5/ton.

The Crop Progress seemingly did little for the wheat markets. The weekly USDA report indicated that spring wheat planting are virtually complete, with the first condition rating of the year coming in only slightly below the long-term average. That appeared to undercut Minneapolis prices somewhat. Winter wheat ratings were unchanged once again. We suspect any pressure being generated by improved harvest prospects were more than offset by short-covering ahead of tomorrow’s big report. July CBOT wheat futures edged up 1.25 cents to $6.1375/bushel in early Tuesday action, while July KCBT wheat stalled at $7.3375 and July MWE futures slid 0.5 cent to $7.04.

Cattle futures are taking a break after their recent surge. Although seasonal weakness is the norm for cash cattle prices at this time of year, cash and wholesale beef prices have proven quite strong lately. That powered the recent CME advance. It now looks as if bulls are taking some profits, with the looming WASDE report likely being an excuse for doing so. August cattle futures dipped 0.35 cents to 142.92 cents/pound as Tuesday dawned over Chicago, while December slumped 0.32 cents to 148.27. Meanwhile, August feeder cattle inched up 0.05 cents to 203.57 and October added 0.15 to 203.97.

Hog futures followed through on Monday’s rally. Hog futures followed the cattle market higher Monday, due in part to spillover strength. Still, hog traders expect much more of the same, particularly with most-active August breaking out to fresh highs. Cash prices jumped yesterday, but pork quotes were stated mixed-higher. August hog futures advanced 0.40 cents to 130.50 cents/pound early Tuesday morning, while December climbed 0.17 cents to 95.27.

Cotton futures are trading mixed on Tuesday morning. The weekly Crop Progress indicated that southern Plains planting surged last week, with condition ratings coming in close to normal. That news weighed upon new crop prices, but old-crop July inched upward. Again, that looks like short-covering ahead of tomorrow’s WASDE report. July cotton gained 0.09 cents to 84.64 cents/pound shortly after sunrise Tuesday, while December cotton sagged 0.12 to 77.17.

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