Corn futures have firmed to post gains of 2 to 6 cents in most contracts.
- Traders are favoring the upside as they even positions for the weekend. In light of the likelihood corn acres will decline from USDA's March 28 Prospective Plantings Projection, traders are unwilling to be caught short the market.
- Heavy precip, while welcome for drought relief in the western Corn Belt, has kept farmers out of the field. Cool temps have also kept soil moisture temps below that needed for planting. Drier weather is expected this weekend, but more rain is expected for the Corn Belt by Tuesday.
- Plus, Gulf basis firmed 3 cents for immediate delivery this morning, reminding of tight supplies.
- End-users may have even more trouble getting supplies as heavy precip is expected to result in partial Mississippi River closures due to flooding.
- Gains are being limited by a reminder that high prices have eroded demand. Japan's corn use in feed rations dropped to 42.3% in February, compared to 44.6% a year-ago.
Soybean futures have softened to post losses of mostly 6 to 10 cents.
- Soybean futures are seeing pressure from spreading activity with corn ahead of the weekend.
- Plus, planting delays in the Corn Belt (likely) will result in more acres being shifted to beans. More precip and in the forecast for the region next week signals this is likely.
- Pressure on old-crop beans also stems from concerns that the bird flu situation will take a bite out of the country's feed demand as poultry production plummets.
- Adding to concerns about export demand for soy, Gulf basis slid 5 cents for May delivery this morning and was steady for other months.
Wheat futures are posting slight losses in Chicago and Kansas City while Minneapolis wheat is slightly higher.
- Another wintry blast for the upper Midwest overnight and the forecast for continued chilly weather is adding to concerns about already slow spring wheat plantings. This is lifting Minneapolis wheat futures.
- Other markets are seeing profit-taking ahead of the weekend as there is uncertainty about how much damage was wrought by last night and last week's freeze events in the Central and Southern Plains.
- Next week's Crop Condition Report will give some indication as to the damage, but it will take time for the full impact to be realized.
Live cattle futures opened under light pressure, but they have since improved to mixed trade. Feeder cattle futures are slightly to moderately lower.
- Some expect cash cattle trade to get underway around $126 at midday as a few feedlots have lowered their asking prices by a buck to $127. This compares to $125 trade seen earlier this week and $127 last week.
- Boxed beef movement has improved this week, but prices have yet to string together several days of gains, which is limiting upside potential for the time being. Yesterday, Choice cuts slid 54 cents and Select fell 24 cents.
- The forecast for cold weather to persist is also limiting expectations about improved beef demand, as this could remain a damper on grilling demand.
- Traders are also focused on evening positions ahead of this afternoon's Cattle on Feed Report, which is expected to show On Feed at 93.9%, Placements at 99.1% and Marketings at 93.5% of year-ago levels.
- Feeder cattle futures are seeing followthrough selling amid demand concerns and some technically based selling. Gains in the corn market are adding pressure.
Lean hog futures are posting slight losses in early trade.
- The cash hog market is mostly steady with a few lower bids as most packers are well supplied on near-term needs.
- But the cash market is expected to strengthen soon as improvement in the product market has widened profit margins and supplies are tightening.
- Yesterday the pork cutout value improved another 98 cents cents -- the fourth consecutive day of gains -- and movement was solid at 392.7 loads.
- But nearby futures have already built in a sizable premium to the cash index, which is limiting buying interest for the time being.
- Also limiting losses are ideas the Chinese bird flu situation could be a boon to the pork market thanks to reduced poultry demand.
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