Corn futures have slipped a little from earlier levels and are posting gains of 1 to 2 cents with old-crop leading to the upside.
- Corn futures are enjoying modest short-covering after recent losses.
- The market is seeing light support from yesterday's crop progress data that revealed corn planting is off to an even slower-than-anticipated start. Six percent of the crop was seeded as of Sunday, which compares to 14% for the five-year average pace.
- However, traders recognize there is still plenty of time to get the corn crop planted. Therefore, their level of concern is limited.
- But yesterday's NWS 6- to 10-day forecast hints that planting will remain slow as below-normal temps are expected. Rain and severe weather in the near-term forecast could also slow planting efforts.
- Support also stems from news Mexico purchased 240,000 MT of corn for 2014-15.
- Also reminding of strong demand, South Korea bought 60,000 MT of corn that can be sourced from the U.S. or South America.
Soybean futures have seen two-sided trade this morning. Contracts are currently 4 to 12 cents lower.
- Early gains in nearby contracts gave way to more profit-taking. The front-month's inability to hold above the $15.00 mark led to increased technical sales.
- China's Ministry of Commerce says it expects the country to import 6.9 MMT of soybeans this month, which is up sharply from its previous forecast of 5.11 MMT. But traders are ignoring the stronger Chinese import forecast.
- Brazil's crushing association Abiove lowered its soybean export outlook by 1 MMT to 43 MMT. This is also being ignored. It maintained its soybean production forecast at 86.1 MMT.
- New-crop beans are being pressured by the forecast for cool weather and precip. The less favorable the weather for timely corn planting, the more likely beans will hold onto record-high March planting intentions.
Wheat futures are narrowly mixed with a downside bias.
- Gains in the corn market and ongoing winter wheat crop concerns initially gave bulls an edge in the wheat market. But this has since given way to mild selling
- USDA yesterday raised the amount of the winter wheat crop it rated "poor" to "very poor" by 1 percentage point to 33%.
- When this data was plugged into our weighted Crop Condition Index (scale of 0 to 500, with 500 being perfect), it showed the HRW crop dropped more than 3 points from last week and the SRW crop improved nearly 2 points from last week. Kansas and Oklahoma saw the greatest declines.
- USDA's report showed just 10% of the spring wheat crop was seeded as of Sunday -- 9 percentage points behind the norm.
- Limiting buying enthusiasm is news Ukraine's ag ministry says farmers in the country have sown 2.55 million hectares of spring grain, or roughly 97% of the expected area.
Live and feeder cattle futures are slightly to moderately higher.
- Short-covering lifted the cattle market late yesterday after a test of support. Followthrough buying is occurring today.
- Adding to the positive tone is a $2.71 surge in Choice boxed beef values and a $2.84 jump in Select yesterday. Also of note, movement of 151 loads was decent considering the price gains. This signals retailers may be planning beef features for grilling season.
- Recently improved movement despite mixed to higher prices in recent sessions is a sign prices have found value levels.
- This has lifted packer profit margins to negative $45.15 a head, which is a $76.65 improvement from week-ago.
- Also contributing to improved margins was $1 to $2 lower cash cattle trade last week.
- This week's showlist is a mixed bag. Cattle supplies in the Southern Plains are estimated down 11,000 head, but Nebraska's showlist is expected to be up around 15,000 head.
- Gains in live cattle are lifting feeder cattle futures. The market is also benefiting from ideas the downside was overdone yesterday and the still-bullish chart posture.
Lean hogs got off to a mixed start, but the market has since improved to post slight to moderate gains in all but the May contract, which is moderately lower.
- The front-month contract remains pressured by the slight premium it now holds to the cash hog index, which continues to slide.
- The rest of the market is seeing some mild bargain buying.
- Yesterday the pork cutout value fell $1.93 and this failed to spur improved movement. Just 231.27 loads changed hands.
- This drew down packer profit margins, though they remain in the black.
- Near-term supplies are plentiful due to plant closures last Friday and/or Monday in observance of the Easter holiday. This is keeping cash hog bids under pressure.
- Traders are also reducing risk ahead of USDA's monthly Cold Storage Report. Last month's report favored market bears.