Corn futures are off to a choppy start. Old-crop futures are currently down a penny, while new-crop contracts are posting fractional to 1-cent gains.
- New-crop corn futures are enjoying light buying today after another solid weekly export sales tally from USDA that signals some improvement in tepid export demand.
- Weekly export sales of 400,300 MT for 2012-13 and 16,900 MT for 2013-14 were near the top end of expectations.
- Gulf basis fell a penny for April delivery this morning, but it was steady to up 1 cent for other months.
- Also, heavy precip in the Corn Belt (while beneficial for recharging soils) and cold temps are expected to keep farmers out of the field for some time -- possibly until early May.
- The Climate Prediction Center's outlook for May calls for above-normal temps in areas of the eastern Corn Belt and below-normal precip across the eastern Corn Belt.
- The market is not overly concerned about planting delays yet, though this does mean some producers may switch acres to other crops. This will continue to limit downside risk for new-crop corn futures and it keeps tight old-crop supplies in mind.
- Strategie Grains raised its 2013-14 corn production peg for the European Union by 500,000 MT to 64.6 MMT.
Soybean futures have rallied to post gains in the teens in old-crop contracts, while new-crop is roughly 5 to 9 cents higher.
- Soybean futures are benefiting from reminders of still-solid demand for U.S. beans. USDA this morning announced China bought 252,000 MT of U.S. soybeans for 2013-14.
- And weekly export sales of 339,400 MT for 2012-13 and 227,400 MT for 2013-14, while not impressive, did match expectations and represent still-solid demand. Export commitments are running 13% ahead of year-ago. Soymeal export sales of 315,200 MT, mostly for 2012-13, topped expectations.
- Gulf soybean basis rose 5 cents for immediate delivery this morning, signaling more demand news may lie ahead.
- Basis around the country also remains historically strong, signaling tight carryover supplies.
- Buying enthusiasm in new-crop beans is being somewhat tempered by growing expectations that soybean acres will rise as producers (especially in the upper Midwest) will switch corn acres to beans due to persistent cold, wet weather.
Wheat futures are 2 to 3 cents higher in Chicago and Kansas City, while Minneapolis is up 4 to 10 cents.
- Wheat futures are benefiting from signs of strong export demand. Weekly export sales of 552,100 MT for 2012-13 and 1.123 MMT for 2013-14 were WELL above expectations. China was the lead buyer.
- Light support also comes from news Strategie Grains lowered its EU-28 wheat production forecast by 500,000 MT to 131.1 MMT, although that is still up 5% from 2012.
- Weather is also supportive for the wheat market, as cold and wet conditions are delaying planting in spring wheat country and another cold front is expected to result in freezing temps across areas of the Central and Southern Plains tonight.
- The market is still working to assess the damage of last week's freeze event.
Live cattle futures are favoring the downside in choppy trade this morning. Feeder cattle futures are posting slight to moderate losses.
- The cattle complex is seeing some light profit taking after most contracts posted sharp gains yesterday.
- But selling interest is being limited by improvement in the boxed beef market which has caused some to revise their cash cattle outlook. Some now expect at least steady cash cattle trade at $127. Futures are at a slight discount to last week's trade.
- But negative cutting margins and heavier showlist estimates add some uncertainty.
- Yesterday, Choice boxed beef values rose 88 cents yesterday and Select firmed 56 cents on strong movement of 238 loads.
- Also, weekly beef exports rose 65% over the week prior to 16,800 MT.
- Strength in the corn market is encouraging profit-taking in feeder cattle futures.
Lean hog futures are enjoying slight gains in early trade.
- Lean hog futures are enjoying some light followthrough buying after yesterday's high-range close. Weakness in the U.S. dollar index is encouraging of this.
- Also supportive are ongoing signs of a seasonal rebound in pork demand. Yesterday, the pork cutout value improved 98 cents and movement was strong at 477.05 loads.
- Improvement in the pork market along with recent steady to weaker cash hog bids have widened packer profit margins. Today, cash hog bids are mostly steady as packers are having no trouble securing supplies.
- The fact that traders are comfortable leaving and even extending the premium the front-month holds to the cash hog index signals the market expects pork strength to soon give the cash market a lift -- especially as supplies are expected to tighten soon.