Corn futures continue to see losses of 3 to 5 cents this morning.
- Concerns about exports to both China and Mexico are weighing on the corn market today.
- Mexico's ag ministry announced the country is restarting its import tariffs on corn at a rate of 20% (possibly due to the ongoing country-of-origin labeling dispute). It's unclear whether this will apply to U.S. corn due to NAFTA.
- Pressure also stems from concern China will reject additional shipments of U.S. corn due to the presence of MIR 162 (Syngenta's Agrisure Viptera).
- Nevertheless, expectations are for USDA to report a strong weekly export inspections tally that falls within the range of 33 million bu. to 38 million bushels.
- Spillover support from the soybean market is helping to limit pressure on corn.
Soybean futures have rallied to trade 9 to 10 cents higher through the July contract, with deferreds posting lighter gains.
- Early pressure on soybeans stemmed from news a case of H7N9 bird flu was confirmed by Chinese health officials in the province of Guangdong. Traders are concerned this could slow feed demand if it is not an isolated incident.
- But early losses spurred a round of bargain buying. A weaker U.S. dollar index and strong risk appetite by traders to start the week is also encouraging to that end.
- Also, traders expect NOPA members to report soybean crushings of 161.3 million bu. in November, which would be a record high for the month.
- A 2-cent uptick in Gulf soybean basis for immediate delivery is also indicative of strong demand.
All wheat flavors are under pressure this morning, with SRW wheat down 5 to 6 cents, HRW wheat mostly 4 cents lower and HRS wheat mostly 3 cents lower.
- Wheat futures are seeing heavy technical-driven selling today as a number of contracts are posting new-contract lows today after sustaining major chart damage last week.
- News Russia raised its grain production forecast for 2013-14 by 5 MMT to 95 MMT adds to the negative tone. Of that figure, wheat is expected to total 55 MMT.
- Also, Coceral, a EU grain lobby, today raised its 2013 soft wheat production forecast for the European Union by 600,000 MT to 135.9 MMT.
- The market remains concerned about high shipping costs slowing demand for U.S. wheat among exporters. Traders expect today's export inspections report to confirm tepid demand.
Live cattle futures are favoring a weaker tone in mixed trade; feeder cattle futures are steady to slightly lower.
- Live cattle futures are seeing some light followthrough sales after Friday's lower close, but some contracts have returned to positive territory.
- Traders are also working to bring futures in light with last week's cash cattle prices of mostly $131, which is down $1 from the week prior.
- Weakness in the product market Friday contributed to weaker cash prices. Choice cuts slipped $1.56 on the day and movement slowed to 134 loads.
- Traders will await showlist estimates and boxed beef action before forming cash assumptions this week.
- Weakness in the U.S. dollar index and strong gains in the stock market are limiting pressure.
Lean hog futures are slightly lower, with nearbys leading to the downside.
- The new front-month February contract holds a $5-plus premium to the cash hog index, opening the door for significant downside risk.
- Building hog supplies means the cash hog market is likely to continue lower over the near-term. Cash hog bids are mostly steady to lower today, though tighter supplies in the eastern Corn Belt have led to scattered higher bids in that region.
- The pork cutout value softened 88 cents Friday, but movement failed to impress at 330.93 loads.