Corn futures have softened to post losses mostly around 5 to 6 cents.
- The corn market is seeing light profit-taking as the market believes Friday's bullish reaction may have been overdone. While USDA's crop and carryover pegs were lower than expected, supplies are still ample.
- Friday's report helped the market close above the 40-day moving average. The contract is testing that level today.
- While China's move to renew GMO registrations for several crops is a positive step, there is still no timeline as to approval of MIR 162 (Syngenta's Agrisure Viptera). This is the variety that has spurred the country's rejections of U.S. shipments.
- Gulf corn basis firmed a penny for March delivery while other shipment months are steady.
Soybean futures have reversed course to post losses of 3 to 5 cents.
- Soybean futures traded up to a new high for the year overnight, but this has since given way to profit-taking.
- But that is the extent of selling interest thanks to an unfavorable forecast for Argentina.
- Extreme heat is expected to develop today in central Argentina and last into the weekend and no precip is in the near-term forecast, drying out soils and stressing the bean crop. However, rain is possible this weekend.
- Weather in Brazil is expected to remain mostly favorable for crop development, although some dry pockets have developed in central Brazil.
- Meanwhile, concerns about Chinese bird flu remain limited for the time being, as the country remains a major buyer of U.S. beans. Chinese authorities have confirmed an outbreak of H5N1 bird flu in a chicken flock in the central province of Hubei and have quarantined the area after culling 46,800 chickens.
Wheat futures are facing light pressure today. All three flavors are 1 to 2 cents lower.
- A slightly firmer U.S. dollar index is encouraging mild profit-taking in the wheat market after a mixed close yesterday. The technical posture of the market clearly favors market bears.
- Pressure is being somewhat limited by some signs U.S. wheat may again be competitively priced. Thursday's export sales report will provide another update on that front.
- Light pressure stems from news Russia has exported 16.384 MMT of grain so far this marketing year -- above the entire 2012-13 marketing year total. Also, Ukraine's ag minister raised the country's 2013-14 grain export forecast by 1 MMT to 33 MMT.
- But there are some dryness concerns in the U.S. Central and Southern Plains. A weekly condition update for Texas shows 38% of the state's winter wheat crop is rated "poor" to "very poor" compared to 28% at the last Nov. 24 update.
Live cattle futures are enjoying slight gains this morning. Feeder cattle futures are moderately higher.
- While early signs point to even higher cash cattle prospects this week after last week's record-setting trade across all major regions, futures continue to reflect traders' unease about the sustainability lofty price levels.
- The February live cattle contract remains at more than a $2 discount to the low end of last week's $139 to $140 cash cattle trade.
- Showlist estimates are estimated down a total of 23,000 head, as declines in Nebraska, Colorado and Texas more than offset a mild uptick in Kansas numbers.
- Meanwhile, the boxed beef market continues to surge, shattering old records. Choice boxed beef rose another $1.96 Monday to $216.94 per cwt. and Select surged $3.18 to $214.76 per hundredweight. Movement slowed to 101 loads, however.
- Gains in the product market have yet to pull packer profit margins into the black, however.
- Feeder cattle futures are seeing corrective short-covering amid ideas yesterdays steep downside breakout was overdone.
Lean hog futures are narrowly mixed this morning.
- Lean hog futures are seeing light followthrough sales today, but the market remains well within its recent consolidated trading range.
- Light pressure stems from the product market's ongoing struggle to put in a low. The pork cutout value slid another 12 cent yesterday, though movement was decent at 372.44 loads.
- But the cash hog index continues to climb slowly higher. February lean hogs remain at more than $4 premium to the index, limiting buying interest.
- Early cash hog bids are mostly steady. While market ready hogs are thought to be plentiful, some unfavorable weather in parts of the Corn Belt is disrupting transportation. Packers are enjoying solid profit margins.