Corn futures are expected to open 1 to 3 cents higher.
- Corn futures finished the overnight session with gains of 1 to 2 cents amid light short-covering, spurred in part by a sharply weaker U.S. dollar.
- Strong weekly export sales may add a little extra incentive to cover short positions this morning. Weekly corn export sales greatly topped expectations at nearly 1.479 MMT for 2013-14 and 509,200 MT for 2014-15. Strong export sales signal prices have dropped to a value level, but corn traders have had a limited response to strong export sales in previous weeks.
- End-of-the-year short-covering may also be seen as traders start to close out their books for the year. Funds are still sizably net short.
- Chinese officials confirmed the news from yesterday that they have rejected the first U.S. dried distillers grains due to the presence of MIR 162 (Syngenta's Agrisure Viptera) that the country has not yet approved. More rejections are expected near-term as Chinese officials increase inspections.
Soybean futures are seen opening 5 to 8 cents higher.
- Soybean futures ended mostly 5 to 7 cents higher overnight on short-covering.
- Weekly soybean export sales topped expectations at 720,200 MT for 2013-14 and 68,100 MT for 2014-15. China was the lead buyer at 517,700 MT for the current marketing year. Weekly exports of 1.168 MMT were also noted for China.
- Traders are digesting news China will end its government stockpiling program for soybeans. It will now rely on imports to refill state reserves. That could further boost Chinese soybean demand at periods throughout the year.
- Traders are also keeping a close watch on the Argentine weather situation. Hot temps are forecast to persist into next week, but there are better rain chances in the 6- to 15-day window for the major grain areas. Traders will monitor updates to forecasts today as they position themselves ahead of the weekend.
Wheat futures are called mixed, but a slightly firmer tone is likely.
- Wheat futures ended the overnight session with a mixed tone in light and choppy trade.
- Wheat export sales for the week ended Dec. 19 topped trade expectations at 596,900 MT for 2013-14 and 60,000 MT for 2014-15. But traders have been non-responsive to weekly sales that have topped expectations in the past as global supplies are plentiful and, therefore, the U.S. faces stiff competition on the global market.
- A sharply lower U.S. dollar index should be supportive for wheat futures, but traders' bearish attitudes toward U.S. wheat export demand is keeping them from seeing dollar weakness as a reason to cover short positions.
- Another blast of arctic air is forecast to hit winter wheat areas of the U.S. next week. While some of the snowcover in the Plains is melting with the warmer temps this week, the areas forecast to get the coldest temps still have a protective layer of snow.
Live and feeder cattle futures are called to open mixed this morning.
- Live cattle futures are expected to be choppy as traders wait on cash cattle trade to develop in the Plains. Mild profit-taking could be seen given that futures are trading above last week's cash cattle price in the Plains.
- Unless packers come with steady to firmer bids compared with last week's $130 trade in the Plains, feedlots may resist moving many animals this week. With feedlots current on marketings, there's no urgency to sell, although it typically doesn't end up working out in feedlots' favor when they carry part of the showlist over.
- Boxed beef prices were mixed Thursday with Choice up 7 cents and Select $1.52 lower. More importantly, however, packers moved only 87 loads of product on the day. Sluggish boxed beef movement this week could keep packers from paying steady to firmer prices for cash cattle.
- Feeder cattle futures are expected to get little direction from either live cattle or the corn market, though both may provide light pressure.
Lean hog futures are expected to open with a slightly firmer tone.
- Lean hog futures are expected to see light short-covering today amid ideas the downside has been overdone. Traders are also looking for a seasonal low soon, though the cash and product markets have not yet indicated this.
- Trade is expected to be light today as the primary focus will be on evening positions ahead of this afternoon's Quarterly Hogs & Pigs Report. The report is expected to show All Hogs & Pigs at 99.9%, Kept for Breeding at 101% and Kept for Marketing at 99.8% of year-ago levels. Winter and spring farrowing intentions are expected to be up from year-ago amid falling feed prices.
- A key in the data will be if it reflects any impacts from porcine epidemic diarrhea virus (PEDV). Traders wrongly anticipated this in the September report, but there are greater odds the data will reflect impacts this time.
- Cash hog bids are expected to be mixed across the Midwest on varied demand. Some plants are still trying to get hogs bought for Saturday and early next week, while other plants are well supplied into next week.