Corn futures are mostly 2 to 4 cents higher.
- An unfavorable forecast for prompt corn planting is lifting futures. Cool conditions prevail across much of the Corn Belt and heavy rains are expected later this week.
- Plus, the NWS 6- to 10-day outlook calls for below-normal temps, which is also unfavorable for timely planting.
- Mild weakness in the U.S. dollar index is also supportive.
- Light support also stems from news China bought 120,000 MT of U.S. sorghum for 2013-14, which traders suspect replaces some of the rejected U.S. corn shipments.
- July corn continues to respect support at $5.00, while the May and December contracts are hovering just below this level.
- Ethanol production the week ended April 18 fell 29,000 barrels per day (bpd) to 910,000 bpd. Ethanol stocks rose 566,000 barrels to 16.52 million barrels.
Soybean futures have seen two-sided trade this morning. The May and July contracts are modestly lower, while new-crop contracts are mostly 4 to 6 cents higher.
- Some mild bull spread unwinding is aiding new-crop beans this morning.
- After reacting negatively to news yesterday that two Brazilian shipments of soybeans originally sold to China are heading back to the U.S., selling interest has moderated as increased U.S. imports of beans are no surprise. USDA increased its import projection earlier this month to a record 65 million bushels.
- Pressure on nearby futures also also stems from the Chinese preliminary purchasing managers' index (PMI) that pointed to ongoing contraction in the nation's manufacturing sector. However, the PMI did improve over month-ago.
- An uptick in Gulf basis this morning points to slowed farmer selling and tight supplies.
- The U.S. ag attache in Argentina estimates 2014-15 soybean plantings will rise to 20.6 million hectares from the current year, up 1.5%, with soybean production estimated at 57.5 MMT.
SRW wheat futures are roughly 1 cent lower, while HRW and HRS futures have turned narrowly mixed.
- Mild selling pressure seen through the overnight hours has eased a little, allowing futures to assume a mixed tone.
- Rain are in the forecast for the Plains, but traders are unwilling to remove too much weather premium at this time as HRW crop ratings continue to fall.
- However, the NWS 6- to 10-day forecast calls for below-normal precip across the HRW Wheat Belt, which suggests more crop stress is ahead.
- There is also some concern with slow spring wheat planting and forecasts calling for cold, wet conditions to continue across the Northern Plains.
- News China sold just 7.2% of wheat up for auction in its weekly offering of state reserves is helping to limit selling. This is down notably from 16.87% last week.
- Selling is also being limited by a weaker U.S. dollar index.
Live cattle futures are slightly lower in early trade. Feeder cattle futures are mixed with nearby contracts slightly higher and deferred months under pressure.
- Price action is mildly weaker as traders wait for cash cattle trade to begin.
- Cash trade prospects are up in the air. While boxed beef prices have surged this week, improving packer profit margins, most are still cutting in the red and overall showlist numbers are up this week.
- Some also note that the price climb in the wholesale market has come at the expense of movement, signaling some resistance to high prices.
- Yesterday's Cold Storage Report showed frozen beef stocks at the end of March of 404.754 million lbs., around 3.2 million lbs. above the average pre-report guess.
- Traders are also beginning to ready for Friday's Cattle on Feed Report. They expect On Feed and Placements to come in at 100.2% and 100.8% of year-ago levels, respectively, while Marketings are expected to come in around 96.4% of year-ago.
- Feeder cattle futures are seeing some mild bull spreading activity today. Deferred months are seeing profit-taking after hitting contract highs yesterday.
Lean hog futures are posting moderate gains through the August contract today, with farther deferred months mixed with an upside bias.
- Lean hog futures are benefiting from yesterday's Cold Storage Report that showed frozen pork stocks at the end of March at 575.223 million lbs., which was 54.6 million lbs. below pre-report expectations and 79.5 million lbs. below the month prior.
- Traders are brushing off a $2.40 plunge in the pork cutout value yesterday as the cold storage data indicates supplies are tighter than thought.
- The slide in the product market has outpaced losses in the cash market. As a result, packer profit margins have dipped into the red.
- Cash hog bids are steady to lower again today as packers work to improve these margins.
- Average hog weights in Iowa/southern Minnesota for the week ended last April 19 hit yet another record high of 286.4 lbs., up 0.7 lbs. from week-ago and 9.3 lbs. above last year.