Corn futures are roughly 1 to 3 cents lower through the March contract this morning while deferreds are mixed.
- Traders are positioning amid a relatively quiet news day. Some are taking advantage of the market's strong gains thus far this week.
- Strong gains were spurred by a reminder of rebuilt demand as well as a lower-than-expected planted acreage projection for corn.
- This increases concern about ongoing chilly temps and some snow in the Midwest that could point to planting delays, making it tough for corn to win acres away from beans.
- Agroconsult slashed its Brazilian corn crop estimate by 1.4 MMT yesterday to 71.2 MMT.
- Ethanol production the week ended March 28 rose 37,000 barrels per day (bpd) to 922,000 bpd. Ethanol stocks rose 222,000 barrels to 15.88 million barrels.
Soybean futures are 2 to 3 cents higher in all but the front month, which is slightly lower.
- Bulls maintain the advantage in the soybean market, though most contracts have reined in gains amid some limited profit-taking.
- Traders pared gains in May soybeans after a failed test of the key $15.00 resistance level overnight.
- The market is responding positively to news late yesterday that Agroconsult slashed its Brazilian soybean crop estimate by 2.3 MMT to 86.9 MMT.
- On the other hand, the nation's trade ministry says Brazilian bean exports jumped from 2.79 MMT in February to 6.23 MMT in March thanks to strong Chinese demand.
- Recent gains in new-crop beans have also been supportive to new-crop beans as the market attempts to hold onto record high planted acreage projections.
- Meanwhile, old-crop beans remain supported by tight ending stocks.
- Soybean oil has been supported by increased talk about the tax "extenders" package that includes a retroactive two-year extension of the biodiesel tax credit. It is expected to pass the Senate finance panel tomorrow, though its fate in the House is uncertain.
SRW and HRW wheat futures have extended overnight losses to trade roughly 9 to 12 cents lower. HRS wheat has also softened to trade 6 to 8 cents lower.
- Technical-based selling is weighing on the wheat market today as the market appears to have put in a top.
- Traders are discouraged that shipping disruptions out of the Black Sea region have not been quicker to develop.
- Plus, some forecasters are calling for improved spring rain chances in winter wheat country, which could help the crop recover from a tough winter.
- Also, the market feels weekly crop condition updates reflecting deterioration of the HRW wheat crop have been factored into prices.
- Pressure on the corn market adds to the negative tone in wheat today.
Live cattle futures are slightly higher, with feeder cattle futures enjoying similar gains.
- While traders expect cash cattle trade to take place at lower prices this week, April futures are already at least $5 below the low end of last week's cash cattle trade.
- Yesterday, a few hundred head of cattle changed hands in Nebraska at $150 -- down $2 to $4 from trade in the region last week. This adds to ideas active cash cattle trade will take place at lower prices.
- Packers are dealing with deeply negative cutting margins and showlist estimates are up this week. Margins have moved from $5.65 in the black a week ago to $90.35 in the red, according to HedgersEdge.
- Plus, the boxed beef market continues to decline. Yesterday, Choice boxed beef values fell $1.25 land Select softened $2.06. The price slide failed to improve movement, signaling there is more downside risk for the market.
- Softer corn prices are adding support to feeder cattle futures. In addition, the April contract is at a $1-plus discount to the cash index.
Lean hog futures were choppy in the early going but have weakened to trade moderately lower in the summer and fall month contracts.
- Selling in the hog pit is picking up amid profit-taking.
- Pressure on nearbys is being limited by the discount they hold to the cash hog index.
- Recent high volatility is often a sign of a top. Plus technicals have long signaled a downside correction is due.
- The pork cutout value ticked higher yesterday, but movement was again light.
- Packers are still enjoying profitable cutting margins, though these have deteriorated in recent weeks.
- Cash hog bids are mostly steady this morning as some plants have reduced kill hours in order to offset tight supplies stemming from the porcine epidemic diarrhea virus.
- China's ag ministry announced today that it will strengthen its management of the pig slaughtering industry this year.