Corn futures are mixed, with old-crop weaker and new-crop firmer.
- A lack of fresh news is leaving traders to engage in some light bull spread unwinding.
- Heavy precip is falling in the heart of the Corn Belt today and more is on the way. The most recent 6- to 10-day weather outlook has turned wetter; it now shows above-average precip chances for most of the Corn Belt.
- This plus an outlook for temps to remain below normal makes it unlikely corn seedings will reach USDA's projected 97.3 million acres.
- Gulf corn basis fell 1 to 4 cents for near-term delivery this morning, signaling the recent price improvement has spurred some farmer selling and/or slowed export demand.
- Weekly ethanol production last week declined 22,000 barrels per day (bpd) to 832,000 bpd. Ethanol stocks also tightened by 300,000 barrels from week-ago to 17.5 million barrels.
Soybean futures have softened from the overnight session to trade 4 to 6 cents lower in old-crop contracts, while new-crop is around 4 to 8 cents lower.
- Selling is picking up in the bean market as traders reverse yesterday's corrective gains amid a sharply higher U.S. dollar.
- Plus, heavy rain in the Corn Belt this week and an extended forecast calling for more precip and chilly temps makes it likely some corn acres will be switched to beans.
- Meanwhile, the source of the Chinese bird flu has yet to the identified and the number of cases and deaths continue to rise. This is reducing the country's feed needs and thus remains an underlying source of pressure on soybean futures.
- A 3-cent decline in Gulf basis for April delivery is indicative of slowing export demand.
Wheat futures have rallied to trade mostly 4 to 6 cents higher in Chicago and roughly 3 to 5 cents higher in Kansas City and Minneapolis.
- Minneapolis wheat is being supported by snow in the forecast for the Northern Plains that would further delay already slow spring wheat planting.
- Light support for Kansas City wheat also stems from chances for sub-freezing temps in the Central and Southern Plains April 18-19.
- There is also talk of acreage abandonment in HRW wheat country after last week's freeze event. The full impact of this event will not be known for some time.
- But countering this is a storm system bringing beneficial heavy precip to these regions.
- The rally is especially impressive considering a sharply higher U.S. dollar index.
Live cattle futures are off to a mixed start with nearby contracts favoring the upside. Feeder cattle futures are slightly lower.
- Thus far, feedlots have stood their ground after light cash cattle sales at $125 Monday in Texas and Iowa. This was down $2 from the bulk of last week's trade.
- While showlist estimates are up sharply and packers continue to cut in the red, the boxed beef market did improve yesterday. Therefore, some traders expect active cash trade to take place at $126 this week.
- Choice boxed beef values rose 56 cents and Select was up 2 cents on solid movement of 192 loads yesterday. If movement and prices continue to rise, this could signal retailers are stocking up for spring grilling features.
- Expectations Friday's Cattle on Feed Report will remind traders of tightening supplies is also encouraging light short-covering.
- But outside markets are limiting buying interest, as a sharply higher U.S. dollar index could further trim export demand.
Lean hog futures are posting slight losses in most contracts this morning.
- Packers are well supplied on near-term needs and profit margins are just barely above breakeven. Thus, cash hog bids are steady to lower this morning. This along with sharp gains in the U.S. dollar index is weighing on lean hog futures.
- But selling interest is being kept in check by expectations supplies will soon tighten as per the seasonal trend and amid signs of improving pork demand.
- The pork cutout value rose 60 cents and movement picked up to 422.7 loads yesterday.
- Traders appear to be in no rush to narrow the wide premium nearby contracts hold to the cash hog index. This signals they expect a seasonal rally is ahead.