What Traders are Talking About:
Overnight highlights: As of 6:15 a.m. CT, corn futures are narrowly mixed, soybeans are mixed with most contracts 1 to 4 cents lower and wheat futures are 1 to 3 cents higher. Cattle futures are expected to open slightly lower, while hog futures are seen opening mixed.
* Record Brazilian soybean shipments coming in February. Brazil shipping agent SA Commodities says data it has compiled signals 650,000 MT of soybeans are scheduled for shipment this month and a record 2.5 MMT of beans are slated for loading in February. That's up sharply from year-ago, when Brazil shipped only 280 MT in January and 959,000 MT in February. As of Friday, there were reportedly 39 ships waiting to be loaded at the Port of Paranagua and 11 waiting at the Port of Santos, Brazil's top two soybean exporting ports.
The long and short of it: Barring significant harvest delays or problems getting beans to ports, Brazil's soybean shipping season is expected to be much stronger than year-ago as harvest got an earlier start and international demand for Brazilian beans is high. If Brazilian exports are as strong as forecast, traders will watch to see if there are cancellations of U.S. soybean purchases.
* Severe weather conditions. High winds, extremely low wind chills and winter weather warnings are common across the country's midsection to start the week. The severe weather will slow livestock transportation and will also impede livestock weight gains, especially for cattle exposed to the elements. There is also concern about winterkill with the winter wheat crop. Because any damage to the winter wheat crop won't be known until the crop breaks dormancy in the spring, the price impact is limited. But the repeated "attacks" from Mother Nature this winter are starting to raise concerns.
The long and short of it: The extreme winter weather is mildly price-supportive for wheat and the livestock markets, but won't spark active buying interest.
* COF Report slightly negative. All three categories in USDA's Cattle on Feed Report came in on the negative side of the pre-report guesses. With Placements nearly three percentage points above the average guess and Marketings just over three percentage points less than anticipated, USDA's Jan. 1 On Feed number came in one percentage point above expectations, but down 5% from year-ago. The "miss" was a modest 72,000 head compared to the average pre-report guess. Still, the Jan. 1 feedlot inventory is 600,000 less than year-ago.
The long and short of it: With all three categories on the negative side of the average pre-report guesses, this could lead to additional profit-taking in cattle futures after futures retreated from record highs to close out last week. But the big discount cattle futures hold to the cash market should limit selling unless traders are convinced a top is in place.
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