Corn futures are 1 to 3 cents higher this morning in corrective trade.
- Reminders of strong demand for U.S. corn is lifting the market to wrap up the month.
- USDA announced a daily U.S. corn sale of 101,600 MT for 2013-14 delivery to unknown destinations this morning.
- Also, Gulf basis has firmed this week, including a 2-cent uptick for March delivery this morning.
- Sharp weakness in the U.S. dollar index also favors market bulls.
- Ag consultancy Safras cut its Brazilian corn crop estimate for 2013-14 by 3.6 MMT from January to 24.6 MMT.
- The market is paying little attention to an update from Reuters that Chinese corn rejections due to the presence of an unapproved GMO strain between November and Feb. 24 totaled 887,000 MT. Traders were aware that some cancellations have been occurring.
Soybean futures have softened to post fractional to 5-cent losses in most contracts.
- Trade in the soybean market has been highly volatile of late, and the March contract has seen trade above and below the $14.00 level today.
- At present, traders are focusing on profit-taking as traders ready positions for month-end. Traders are also engaging in some spreading with corn.
- Sharp weakness in the U.S. dollar index is helping to limit pressure.
- USDA's announcement Egypt purchased 120,000 MT of optional origin soybeans for 2014-15 is also slightly supportive this morning.
- Also limiting pressure, Safras slashed its 2013-14 Brazilian soybean crop estimate by 5.7 MMT from January to 86.1 MMT due to drought in major soy growing states and heavy rains in Mato Grosso.
- Gulf soybean basis is mixed this morning. It is 5 cents higher for March delivery and down 2 cents for April delivery. Other delivery months are steady.
SRW wheat futures are mostly 9 to 12 cents higher this morning, while HRW is posting gains of 5 to 10 cents. HRS wheat is 2 to 15 cents higher.
- After facing heavy profit-taking yesterday, traders have returned as bargain buyers to wrap up the month.
- Significant losses in the U.S. dollar index is also supportive, as it makes U.S. wheat more attractive globally.
- They are also paying a bit more attention to the forecast. Windy, warm weather in the Southern Plains is drying out soils. Meanwhile, widespread snow is expected on the Central Plains this weekend with significant ice accumulation expected. Bitter cold air is expected to trail the system into the Plains and Midwest, renewing winterkill concerns.
- Gulf SRW basis is 4 cents firmer this morning for March delivery and steady for other months. HRW basis is steady.
Live cattle futures are off to a narrowly mixed start. Feeder cattle futures are slightly lower.
- Cash cattle trade is thought to be largely complete after additional sales yesterday. Trade in Nebraska ranged from $151 to $152.50, while sales in the South took place around $150.
- Traders are showing little urgency to narrow the gap the April contract (which after today will be the new front month) holds to the cash market, signaling they do not expect these record-high cash prices to be maintained.
- Yesterday, the boxed beef market continued its impressive runup. Choice boxed beef values surged $2.46 and Select rose $2.33. This did slow movement to 137 loads, possibly signaling some resistance to higher prices.
- Feeder cattle futures are seeing some additional profit-taking at month-end as traders look to take advantage of the recent runup. Higher corn prices add light pressure.
Lean hog futures gapped higher on the open posting moderate gains in most contracts. This is the third consecutive gap-higher start for the April contract.
- Ongoing strength in the cash and products market are lifting lean hog futures again this morning.
- Also, the technicals clearly favor market bulls as traders ready positions for the calendar flip to March. Sharp weakness in the U.S. dollar index adds to the bullish posture of the market.
- The pork cutout value surged $2.05 yesterday and considering carcass values of nearly $102 per cwt., movement was decent at 305.68 loads.
- Gains in the pork market have kept packer profit margins in the black, which is making them more willing to pay steady to higher for cash hog again today.
- Processing plants and feedlots are gearing up for another winter storm event this weekend, which is expected to be followed by another cold blast.
- This week's kill is expected to be up 20,000 head from the week prior at around 2.168 million head.