Soybean plantings to lag, analyst says
The beans finished the week higher, but off the session highs, as a bit of profit taking took some of the days gains away. For the holiday shortened week, the July beans rallied 33.75 cents, while the new-crop beans rallied 56.5 cents.
The market continues to be fueled higher on planting delays. On Tuesday, the USDA reported that only 44% of the crop had been planted as of last week. With the wet weather we have seen this past week, the trade is only looking for a slight improvement in the planting progress for Monday’s report. Early talk is that plantings should come in at 55%, still way behind the five-year average of 74% planted. Friday’s long-range forecast was viewed bullish, as the noon runs put more rain in the forecast.
Additional strength in the market was derived from margin liquidation. With Friday being the last trading day of the month, margin clerks were demanding margins get covered or positions be liquidated. With the short position feeling the stress after this week’s runup, the liquidation of short positions added to today's runup. Today’s export sales came in mixed with a net 108,000-tonne cancellation of old-crop beans and new-crop sales coming in at 756,000 tonnes. Next week’s trade direction will be dictated by weather. The wetter the forecast, the more bullish the trade will be Sunday night. If the rain is taken out of the forecast, look for the market to come under some pressure.
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Lean Hog Commentary
This week’s wrap-up has to focus on the smaller than expected hog supply first. Since the start of Ma, we have seen hog slaughter run 0.4% below last year. This is almost 3% lower than what the March Hogs and Pigs report would have implied for this time period. We suggest this shortfall is due both to PED as well as worse than expected breeding herd performance from last summer. It will be interesting to see what USDA’s June Hogs and Pigs survey will find. Will they go back and adjust the previous reports to mesh with recent actual slaughter and stop there, or will this shortfall in hogs be reflected in future numbers as well?