Morning Highlights


Highlights


  • Overnight markets as of 7:00 am. Corn down 1 1/2, Beans down 8, Wheat: Chicago down 7, KC down 5 1/2, Mpls down 1 3/4.
  • Outside markets as of 7:00 am. Oil down 67 cents,  gold up 50 cents, U.S. dollar down .04 pts, Dow up 40  pts.        .
  • Shuanghui Group, China's biggest pork producer, is in an agreement to acquire Smithfield Foods Inc. for as much as 5 billion dollars. Stock holders and regulators will have to agree to the transaction.
  • USDA export sales will be delayed until Friday morning at 7:30 am due to the Memorial Day holiday.

Corn


  • Many in the trade are starting to pencil in a 3 million acre reduction in corn planting due to the excessive rain over the past week and what is forecast into early next week. Most of the loss is expected in the Western corn belt. Assuming 158 bu/ac and 92% harvested acres that would reduce the crop to 13.7 billion bushels and should reduce next years carryout to 1.6 billion bushels.      
  • The Eastern corn belt continues to dodge most of the moisture and planting continues with many areas finishing up corn and making good progress on beans.
  • Good producer selling of old crop is putting pressure on the old crop / new crop spreads.
  • South Korea bought 68 tmt of feed corn.

Outlook: Mixed to better. Watching the weather.


Beans


  • Inter commodity spreading, selling November beans / buying December corn, kept beans under pressure all session yesterday. The lost corn acres should shift to beans.
  • Palm oil down 27 ringgit at 2372 ringgit. Chinese beans were lower overnight with meal higher.
  • China cancelled 147 tmt of old crop soybeans. There was talk of some new crop cancellations also.
  • Weaker basis levels continue to pressure front end spreads.

Outlook: On the defensive with weaker cash markets shifting acres.


Wheat


  • The USDA announced a non-approved strain of genetically engineered wheat has been discovered in an Oregon field. It is the same strain that was tested in 2005. There is no genetically engineered wheat approved for U.S. farming.
  • Japan is suspending imports of U.S. Western White wheat grown in Oregon. The suspension does not include existing contracts.
  • The U.S. will need to ship 38 million bushels this week, the last week in the marketing year, to meet the USDA projections for the 2012-13 marketing year.   

Outlook: Lower on concerns about GMO wheat.