Corn futures are around 5 to 6 cents higher in early trade.
- Corrective short-covering is lifting the corn market today.
- Weekly corn export sales of 437,400 MT for 2013-14 fell short of expectations, but the tally still represents improved demand since this summer. Export commitments for the 2013-14 marketing year are running 31% ahead of the previous year.
- A 3-cent uptick in Gulf basis for immediate delivery signals some more export news may be ahead.
- But otherwise, buying interest is limited as rains are moving across the Corn Belt and harvest is picking up pace.
- December corn is trading near session highs, but has a lot of work ahead in order to signal a near-term low has been posted.
Soybean futures opened under pressure, but the market has seen light bargain buying at times to lift the market to mixed trade.
- A limited reaction to fresh demand news this morning signals a new source of support is needed.
- This morning's weekly export sales data showed soybean sales of 923,300 MT for 2013-14, which came in stronger than expected.
- Also this morning, USDA announced a 120,000-MT soybean sale to an unknown destination for 2013-14.
- This morning's U.S. Drought Monitor reflected expansion in the Midwest drought footprint, but recent and expected rain for the Corn Belt are expected to result in some improvement in the next update.
- The Seasonal Drought Outlook, on the other hand, points to drought persisting or intensifying across major bean growing states over the next three months.
- Nevertheless, basis levels are softening at interior locations as new-crop supplies come available.
Wheat futures have taken an atypical leadership role this morning and are leading today's rally with double-digit gains in most contracts at all three locations.
- Strong weekly wheat export sales of 704,400 MT for 2013-14 and a net sales reduction of 2,500 MT for 2014-15 topped expectations and eased concerns that the U.S. is losing out on export business to other countries, especially those of the Black Sea region.
- Wheat is also seeing some technical short-covering amid ideas the downside has been overdone. Strength is impressive considering negative outside markets.
- The market is also getting a boost from the U.S. Seasonal Drought Outlook that calls for drought to persist or intensify in much of the Southern Plains. The market has recently been pressured by favorable rains in the region.
Live and feeder cattle futures are off to a slightly to moderately higher start.
- The spread between bid and asking prices remains wide, which signals late-week trade is again likely. Last week, sales took place mostly at $123.
- Trade may not get underway until after the release of the Cattle on Feed Report Friday, which is expected to show all categories well below year-ago levels, confirming tightening supplies.
- Supplies are heavier this week, but the gain can be chalked up to a big increase in Nebraska. Showlist estimates are slightly lower at other locations.
- The boxed beef market improved yesterday with Choice and Select values rising 28 and 75 cents, respectively, on solid movement of 202 loads
- Export demand for U.S. beef continues to impress. Beef export sales the week ended Sept. 12 of 16,800 MT for 2013 and 300 MT for 2014 represents solid demand.
- But packer cutting margins have tightened in recent weeks to near breakeven, which could make them unwilling to raise bids.
Lean hog futures are posting slight to moderate losses.
- Expectations that the hog market will soon get back to a more seasonal downward pattern is encouraging light profit-taking in the market today.
- Above-normal temps in recent weeks hog weights and the one-month temp outlook calls for above-normal temps to persist through October.
- Nevertheless, traders anticipate hog weights and production will soon build.
- Recent supply tightness has lifted the CME cash hog index. October futures are still at more than a $5 discount to the index.
- This plus strength in the pork market are expected to limit selling interest to short-covering for the time being, as the technical posture of the market still favors market bulls.
- Gains in the pork market have also pulled packer cutting margins back into the black.