HIGHLIGHTS
· MARKET TREND—Mostly Lower: CN, down $.0025; SN, steady; WN, down $.01; KWN, down $.0050
· MACRO—Moody’s cuts Chinese debt rating from Aa3 to A1 & changes outlook from stable to negative. ASIA—Higher: Nikkei, +0.66%; Shanghai, +0.06%; Hang Seng, +0.10%. EUROPE—Mostly Lower: DAX, -0.11%; FTSE, +0.24%; CAC, -0.06%. Wall Street-Futures are higher: DOW, +9; S&P, +0.25; NAS, +7.50. EXTERNALS: Sep $ Index, -.004 @ 97.065; June Gold, -3.1 @ $1,252; July Crude, +$0.14 @ $51.61
· T-storm Weather: Areas of significant rainfall affect Illinois and the eastern Corn Belt over the next two days as a large upper-level system swirls to produce 0.75" to 1.50" (centered on Indiana). Attention immediately turns to another system that passes over Fri.-Sun. and produces more rain (0.50" to 1.00") across the same area, as well as the Delta. After brief warming over Thu.-Sat., the weekend system exits Sat.-Sun. & a cooler period resumes. Our forecast is for drying to accompany coolness next week
· Corn: CN down $.0025 @ $3.6925; CZ down $.0025 @ $3.8750. Fund selling amounted to 9 K on Tuesday
· SB: SN up $.0025 @ $9.4850; SX steady @ $9.4850. Funds: Sold 6 SB, 2 SBM, 5 SBO. Board Crush: $.81, -2; LY; $1.37
· Wheat: down $.01 @ $4.2850; WU down $.0125 @ $4.4275. The funds were estimated to have sold 5 K yesterday
CORN/SORGHUM
· ATI Research: The 5-year avg. for U.S. corn planting progress increases approx. 8% from May 21-28 to 93%
· T-storm Weather: The edge of coolness next week may become focal area for thunderstorms. As such, at least some rain is added to next week’s forecast with location and amounts to be determined (esp. away from northern Plains)
· Consultant: Argentina corn crop estimate is unchanged at 39.0 MMT. Corn harvest only advanced 1.3% last week to 33.1% due to wet weather, high grain moisture and the fact that farmers were focused on their soybean harvest
· Ethanol margins: $0.09 per gallon—down vs. $0.13 last week and below $0.39 in 2016. EIA report at 9:30 AM CDT
SOYBEANS/WHEAT
· ATI Research: The 5-year avg. for U.S. soybean planting progress increases approx. 16% from May 21-28 to 68%
· Consultant: Argentina soybean crop est. is unchanged at 56.5 MMT. Harvest is approx. 75% complete
· T-storm Weather: By late next week & weekend (June 1-4), milder pattern most likely assembles for central U.S., but numerous uncertainties exist. We continue to forecast a mild & stormy period with wettest weather central & south
· ATI Research: 5-year avg. for U.S. spring wheat emergence increases approx. 15% from May 28-June 4 to 74%
· CBT July 2017 wheat futures on Tue. closed at $4.29 ½; one year ago, CBT July 2016 wheat settled at $4.64
ENERGY
· Firmer: CLN17, +$0.14 @ $51.61; EBN, +.17 @ $54.32;EBN-QCLN, +.05; RBN,+.0121; NGN, +.015; HON, +.0078
· EIA Report Estimates (API): crude oil, -2.7 (-1.5); Gasoline, -0.8 (-3.2); Distillates, +0.3 (-1.9)
· Cash ethanol markets were lower on Tuesday: Chicago down 3; New York, Dallas and Tampa eased 2; Gulf declined 3 ½; and LA was 1 ½ lower at $1.66 ½ per gallon
· Ethanol RINs were weaker on Tuesday: 2016’s and 2017’s down 1 ¼ to 64-69
· The June RBOB/June ethanol spread continues to widen, up $.0039 to +$.19740/gallon, premium RBOB
LIVESTOCK/POULTRY
· Choice boxed beef values fell $2.14 on Tuesday to $245.74 , and are $4.14 lower vs. a week ago
· Estimates for Friday’s USDA Cattle on Feed: May 1 on feed, 100.8%; Apr placements, 106.5%; Marketed in Apr 101.8%
· USDA mandatory pork carcass cutout value added $1.45 Tue. to $89.53, is up $4.86 v last week & highest since July 19
· CME Lean Hog Index was $0.05 higher on Tue. at $75.94. June futures firmed $0.80 and are $4.21 above the index
Sources: Bloomberg, Dow Jones, AP, DTN, T-storm Weather