5/21/12 MARKET COMMENTS: Overnight the markets traded higher on a hot forecast. Corn is trading up 2-4, soybeans up 7-14, and wheat down 2-6
N American Outlook; Precip was seen in the NW and western grain areas, light precip was seen in the central belt, the 3 day NWS forecast shows heavy precip in NW and portions of the western belt…The GFS is slightly drier in the Plains and drier Midwest vs. the 12z yesterday, the Euro is unch in the Plains and Midwest…Temps are normal to above (the hot weekend coming up is partial offset by the first part of the week being cooler than normal) for the first half of the forecast period, normal to below for the second half…
Overview Comments; Overall the 10-20 day temp pattern is shows a smaller risk of very hot temps, overall the 20 day pattern is warmer than normal vs yesterday’s very hot mid period, cool late period. Precip wise the 6z this morning broke the string of 4 consecutive GFS runs being wetter in each run.
Summary; The GFS shows heavy precip potential for 40-50% of the Plains, the Euro 10-20% for the Plains...for the corn belt the GFS shows 50-60% coverage, the Euro 20-30%…of over 1.5” or greater precip for the entire forecast period…
IN OTHER NEWS:
Monday, May 21st, 2012
· Crop conditions this afternoon are expected to show initial corn condition ratings. Initial corn condition was 63% G/E last year. 2010 was 67%, 2004 was 71% and 2000 was 70%.
· China soybean imports in April were 4.884 mmt, up 25.99% YOY. It brings YTD imports to 18.148 mmt, up 22.3% YOY. Corn imports were 16,421 MT in April bringing YTD imports to 1.760 mmt. China’s wheat imports were 293,376 MT in April vs 10,254 MT LY.
· Friday’s Cattle on Feed showed May 1 all cattle on feed at 99% of last year’s levels vs trade expectations of 100.3%. April placements were 85% vs trade expectations of 88% and marketings at 100% vs 98.4% expected.
· Ukraine’s state weather forecasters said that poor weather will likely cut their winter grain harvest to 14 mmt, including no more than 12 mmt of wheat from 23 mmt in 2011. They see wheat harvest between 10-12 mmt in 2012 and said this number won’t be revised significantly.
· German wheat acreage is expected to be cut to 2.870 mil hectares this year, down 9.5% YOY after heavy frosts damaged sowings. Rapeseed acreage was reduced 0.5% to 1.321 mil hectares.
· Brazil’s Central Bank signaled further interest rate cuts as inflation is expected to converge towards 4.5% target from its current level of 5.1%.
· Late last week, the Argentine govt suspended grain trading company Nidera’s export permit as part of an ongoing tax dispute. The govt is seeking $16.2 mil in export taxes from Nidera.
· Fed proves more bullish than Wall Street forecasting US growth
http://www.bloomberg.com/news/2012-05-20/fed-proves-more-bullish-than-wall-street-forecasting-u-s-growth.html
· Wheat climbs to highest level since September on dry weather
http://www.bloomberg.com/news/2012-05-21/wheat-climbs-to-highest-level-since-september-on-dry-weather.html
· Investors least bullish in 2012 as crisis escalates
http://www.bloomberg.com/news/2012-05-20/investors-least-bullish-in-2012-as-crisis-escalates-commodities.html
· Dalian Futures (dollar converted): Corn (Sept 12) $9.67 (+0.07); Beans (Sept 12) $18.38 (+0.07)
Look for choppy markets to continue.
03:32