Corn futures have moved back to the upper end of their daily trading range to trade 7 to 8 cents higher.
- Traders responded positively to yesterday's set of reports from USDA as its corn plantings projection came in more than 1 million acres below expectations and well below year-ago. Grain stocks came in as expected, reminding of improved demand.
- Yesterday's gains and the upside breakout from the market's consolidated trading range overnight is also encouraging some technical-based buying today. Many contracts are trading at seven-month highs.
- Considering the lower-than-expected plantings peg from USDA, traders are also working to buy back some acres from soybeans.
- Snow in some areas of the Corn Belt this week and a return of cold temps also keeps concerns about the possibility of spring planting delays in mind.
- The South is currently dealing with planting delays. Texas corn plantings stand at 28% complete versus 48% for the five-year average.
Old-crop soybeans are enjoying gains in the teens to 20s, while new-crop beans are posting lighter double-digit gains.
- Old-crop beans are leading gains thanks to some followthrough bull spreading encouraged by yesterday's confirmation of tight March 1 soybean stocks.
- New-crop beans are seeing some short-covering after traders viewed yesterday's reaction to USDA's record-high soybean planting projection as overdone. High bean acres have long been anticipated.
- Traders are not overly concerned about a reminder of a cooling Chinese economy as traders believe the nation's government will step in with stimulus measures to boost economic activity if data continues to disappoint.
- November beans are testing resistance at $12.00 today. Old-crop beans broke through their wide consolidated trading range yesterday or today and are enjoying strong followthrough buys today.
- Soybeans are also benefiting from news China's ministry of commerce raised its soybean import estimate for March by 440,000 MT to 5.69 MMT. The ministry expects bean imports to hold strong in April at 5.11 MMT.
Wheat futures of all three flavors remain under pressure, with most contracts posting losses between 6 and 10 cents.
- Profit-taking is weighing heavily on the wheat market today. Yesterday's report-inspired reversal failed to break the market's recent downtrending pattern.
- Traders view winter wheat crop deterioration as factored into prices. Thus they are brushing off weekly crop condition updates reflecting continued condition declines on the Southern and Central Plains and ongoing dry, windy weather on the Southern Plains.
- Adding pressure, winter wheat is emerging in the Midwest in generally good condition.
- Ukraine's ag ministry says grain exports climbed to 2.98 MMT in March versus 2.82 MMT in February. This sign that grain exports have been largely uninterrupted by political unrest in the region is adding to pressure on wheat today. It could be the 2014 crop that sees the greatest impact -- in terms of production and exports.
Live and feeder cattle futures are slightly to moderately lower in early trade.
- Cattle futures remain pressured by expectations for lower cash cattle trade this week.
- The boxed beef market continued its slide yesterday and the price drop failed to spur improved movement.
- Meanwhile, showlists are slightly higher in Nebraska, Kansas and Texas and steady in Colorado this week, which should give packers more leverage in negotiations this week.
- Meanwhile, packers have seen profit margins dip into the red this week, giving them additional incentive to lower bids.
- On the other hand, pressure is being limited by the fact nearby futures already hold a substantial discount to last week's cash cattle trade that took place from $150 to $152 on the Southern Plains and at $152 to $154 in northern locations.
- Gains in the corn market are adding to pressure on feeder cattle futures.
Lean hog futures gapped higher on the open and are posting sharp gains.
- Lean hogs are seeing active short-covering today as traders view yesterday's steep losses as a bargain buying opportunity. The high-range close yesterday also helped shift momentum back to market bulls
- But recent gaps higher or lower signal a top is likely near in the lean hog market. Also, the market remains technically overbought according to the Relative Strength Index.
- Steep losses yesterday were the result of a bearish Hogs & Pigs Report Friday. However, traders are somewhat discounting this report as the survey was sent out in December and there are some indications it did not account for the full impact of the porcine epidemic diarrhea virus (PEDV).
- Also supportive is the fact April futures remain at a $2 discount to a still-climbing cash hog index that was most recently pegged just 13 cents shy of $130.00.
- A strong start to the week for the pork market is also supportive for futures. The pork cutout value firmed $1.23 yesterday, though movement remained light at 213.88 loads.
- Cash hog bids are mostly steady after yesterday's sharp selloff in futures. Profit margins have diminished for packers and some plants are thought to be scaling back kill hours due to scarce supplies.