FIRM TONE OVERNIGHT... Soybean futures paced gains overnight amid short-covering. As of 6:30 a.m. CT, soybean futures were trading 11 to 14 cents higher, corn 1 to 3 cents higher, Chicago wheat mostly 3 to 4 cents higher, Kansas City wheat 1 to 2 cents higher and Minneapolis wheat mostly 1 to 3 cents higher. The U.S. dollar index is weaker this morning.
RAINS SEEN SHIFTING NORTH AND EAST... Forecast models continue to signal rains over the coming days, but the heaviest precip is now likely over northern and eastern areas of the Corn Belt instead of the central Belt. Outside of Minnesota, Wisconsin, Michigan, Indiana and Ohio, rains are expected to be very spotty and light. Forecast models for the 6-10 day window are in disagreement on precip and temps.
CORN, SOYBEAN CCI RATINGS DECLINE AGAIN... When USDA's weekly crop condition ratings are plugged into the state-weighted Pro Farmer Crop Condition Index (CCI; 0 to 500 point scale), the corn crop dropped another 6 points to 249, while the soybean crop dipped 3 points to 271. The CCI rating for corn and soybeans in Nebraska showed modest improvement, while other Corn Belt states posted mild declines for both crops.
PRIVATE FIRM LOWERS RUSSIAN WHEAT EXPORT FORECAST... SovEcon expects Russian wheat exports to fall to 8.5 MMT in 2012-13 from 21.6 MMT in 2011-12. The private consulting firm says the Russian government is likely to use intervention stocks to control prices instead of export curbs or tariffs as such actions will be politically more difficult once the country gains World Trade Organization membership later this month.
SOLID START FOR BOXED BEEF MARKET... Boxed beef prices were 35 to 77 cents higher Monday and packers moved a solid 196 loads of product. If the boxed beef market builds on yesterday's price performance through the week, odds of higher cash cattle prices compared with last week's $118 to $119 trade would improve.
PORK MARGINS CONTINUE TO STRENGTHEN... A $1.10 gain in the pork cutout value Monday combined with the steady to weaker cash hog bids further improved packer margins. While packers are cutting solidly in the black, demand for cash hogs is expected to be limited as market-ready supplies are plentiful. As a result, cash hog bids are expected to remain steady to weaker across the Midwest.
CHINA STOCKPILING PORK... The Chinese government is stockpiling pork in frozen storage to keep domestic prices from falling further, according to the National Development and Reform Commission. The government has also urged producers to lower hog production.
OVERNIGHT DEMAND NEWS... Taiwan buys 58,000 MT of U.S. soybeans. South Korea tendered for up to 70,000 MT of corn and up to 70,000 MT of feed wheat. Algeria tendered for 50,000 MT of optional origin milling wheat. Japan is seeking 106,530 MT of U.S. and Australian wheat in its weekly tender.