Corn futures continue to enjoy gains of 3 to 6 cents across the board.
- Traders are covering short positions in the corn market amid tight old-crop supplies and weather concerns.
- Gulf basis levels around the country are historically strong and Gulf basis levels have firmed this week, which indicates limited supply availability and improved demand.
- A 1- to 3-cent rise in Gulf basis this morning for April delivery could signal export demand news lies ahead.
- Meanwhile, new-crop corn futures are benefiting from concerns that a chilly, wet start to spring and forecasts for this pattern to continue for the next 10 days could keep farmers out of the field long enough that either yield potential declines or they switch acres to beans.
- On Monday, the market will be given its first look at planting progress for the corn crop.
Old-crop soybeans have improved to trade mostly 7 to 13 cents higher in old-crop futures while new-crop futures are up 2 to 5 cents.
- Soybean futures are enjoying corrective short-covering ahead of the weekend.
- This morning, USDA announced a 110,000-MT bean sale to unknown destinations for 2013-14 delivery. This is giving new-crop beans a lift.
- Old-crop soybeans are also benefiting from signs that bargain buying may be occurring. Gulf basis levels have firmed recently, including a 4-cent rise for immediate delivery this morning. Early gains led to some technical buying.
- This is especially supportive when one considers the tight supply situation and South America's inconsistencies in getting bean supplies shipped.
- Bullish enthusiasm in new-crop beans is being limited by speculation corn planting delays may lead to acres being switched to beans -- especially in northern areas.
Wheat futures are off to a strong start this morning with Chicago double-digit higher, Kansas City 8 to 11 cents higher and Minneapolis enjoying gains of 7 to 14 cents.
- On Monday, the market will get another HRW crop condition update from USDA and additional reductions are fully expected after the freeze event across the Central and Southern Plains this week. Thus, traders are covering short positions ahead of the weekend.
- Adding to concerns is a forecast for another possible freeze in areas of Kansas and the Texas Panhandle next week.
- Gauging the full extent of any freeze damage will likely take several weeks, however.
- In addition, wheat is benefiting from yesterday's confirmation of Chinese SRW wheat buys and anticipation of more such buys due to gluten problems with the Canadian wheat crop.
- Spillover from corn and soybean futures is also supportive.
Live cattle futures got off to a narrowly mixed start, but most contracts are now posting slight gains. Feeder cattle futures are slightly lower in most contracts.
- Only light cash cattle sales took place in Iowa and Nebraska yesterday, signaling more trade may be ahead today, but in major production regions, cash trade is largely complete at $127 -- down $1 from last week.
- Nearby futures remain at a discount to these cash prices, signaling beef demand concerns have soured near-term cash market expectations.
- A chilly start to spring has delayed the typical seasonal rally in the meat markets.
- Yesterday, boxed beef movement did improve to 212 loads, but it took lower prices to do so. Choice cuts fell 80 cents and Select fell $1.58.
- But some traders are covering short position on hopes this will soon turn around. Grocers are heavily featuring premium cuts of beef on the front page of this week's advertisements.
- Strength in the corn market is again weighing on feeder cattle futures.
Lean hog futures are cautiously favoring the upside in early trade.
- The late-season winter storm continues to disrupt operations in some northern locations, but the impact of the power outages and travel disruptions is fading. A large kill is expected this weekend to make up for downtime.
- Cash hog bids are steady with a few lower bids today as packers are working to improve negative profit margins.
- April lean hog futures expire at noon CT today. The contract is currently at around a 50-cent premium to the cash hog index. The soon-to-be front-month June contract is at nearly a $6 premium to the cash index, which is weighing on the contract.
- But the rest of the market is benefiting from signs domestic pork demand is improving. Slower exports have resulted in heavier domestic supplies which has weighed on pork prices this year. But the past few days, movement and prices have improved.
- Some expect that when grilling demand does pick up, consumers will opt to throw relatively cheap pork on the grill over beef, as high gas prices and the payroll tax hike has cinched consumers' budgets.