Corn futures are called 1 to 2 cents higher on light followthrough buying.
- Corn futures opened the overnight session under light profit-taking pressure but ended the session marginally higher.
- Traders still have Friday's friendly USDA reports on their minds, in which USDA lowered the size of the 2013 corn crop, revealed record first quarter use and lowered carryover.
- While the report data was friendly, carryover is still up sharply from year-ago, which is limiting followthrough buying this morning.
- A high-range close today following Friday's key bullish reversal would be a sign a near-term low has been posted.
- South Korea bought 137,000 MT of U.S. corn originally destined for China at a discounted price.
Soybean futures are called 3 to 5 cents lower as focus returns to the South American crop.
- Soybean futures ended the overnight session mostly 2 to 5 cents lower as focus has returned to prospects for a record-large South American crop.
- Forecasts for hot and dry conditions in Argentina this week are a concern for crop prospects, but mostly favorable weather is expected to continue across Brazil.
- Traders also have USDA's Friday reports on their minds, in which USDA raised the size of the soybean crop and left 2013-14 carryover unchanged at 150 million bu. due to stronger-than-expected first quarter use.
- Gulf soybean basis is 1 cent firmer for immediate delivery to stand $1.24 over March futures, reflecting ongoing strong demand.
Wheat is called 2 to 3 cents higher on spillover from corn.
- SRW and HRS wheat ended the overnight session mostly 2 to 4 cents higher. Nearby HRW contracts were up 1 to 2 cents and deferreds finished mixed.
- Following Friday's sharp losses, wheat is due for a corrective bounce to correct the oversold condition of the market.
- While USDA pegged 2014 winter wheat acreage below expectations, it raised U.S. and global wheat carryover from last month, which gave the reports a negative read.
- Argentina's ag ministry has raised its 2013-14 wheat crop estimate by 200,000 MT to 9.2 MMT. Exporters and importers are waiting on the Argentine government to announce wheat export permits for 2013-14.
- On a positive note, Egypt purchased 55,000 MT of U.S. SRW wheat. The country is a value buyer, which signals U.S. wheat is once again competitive on the global market.
Live cattle futures are called higher in reaction to record cash cattle trade.
- Live cattle futures are expected to see a boost from news of record cash cattle trade of $139 to $140 in the Plains on Friday.
- February live cattle ended last week at around a $3 discount to the top of last week's cash trade, which suggests traders believe a near-term high is in the works.
- But the boxed beef market also rallied to record levels on Friday, with Choice up $2.93 to $214.98 and Select up $2.53 to $211.58.
- Traders will be watching the beef market closely to start the week for a gauge of this week's cash prospects.
- Light strength in the corn market this morning will limit buying in feeder futures.
Lean hog futures are called mixed on position squaring.
- Lean hog futures are expected to see a choppy start as traders even positions and wait on clear direction from the cash market.
- The cash hog market is expected to see a mostly steady start as some locations are in need of supplies.
- Higher slaughter needs after last week's unfavorable weather could lead to some firmer bids. Plus, packers are again enjoying strong profit margins.
- Pork cutout values softened by 11 cents on Friday amid decent movement of 366.96 loads.
- Nearby lean hog futures are trading at a sizable premium to the cash index, which raises the risk of stepped up pressure in the near-term. But it also suggests that traders are optimistic the pork market is nearing a seasonal low.