Corn futures remain slightly higher, but have backed off earlier highs to trade mid-range. Most contracts are fractionally to 2 cents higher.
- Light short-covering is supporting corn futures this morning amid ideas the downside has been overdone.
- Until the recent heavy fund selling subsides, the upside is limited to mild corrective buying. Funds have sold 81,000 contracts (405 million bu.) of corn since last Thursday.
- Fresh demand news is also needed for futures to secure a short-term low. While the sharp price break has triggered some Asian demand, most of the business is expected to go Brazil and Argentina.
- Expectations for a big rebound in corn production this year continue to hang over the market and are limiting buying interest in new-crop futures.
- Gulf basis has softened 3 cents this morning to stand 53 cents above May futures.
Soybean futures have extended losses to trade mostly 8 to 14 cents lower.
- Soybean futures are being pressured by a lack of bullish fundamental news and followthrough chart-based selling.
- The violation of key support by November soybean futures is pressuring the new-crop contract this morning. Plus, traders are expecting a big rebound in production this year.
- Demand concerns are also weighing on soybean futures. Bird flu in China is sparking concerns of a reduction in demand for soybeans to process into soybean meal for feed.
- And despite continued congestion at Brazilian ports, traders realize the window for U.S. soybean exports is quickly closing.
- Gulf soybean basis is steady this morning to stand 73 cents above May futures.
Wheat futures at all three locations are posting double-digit gains in most contracts.
- Wheat is being supported by short-covering amid ideas the downside has been overdone.
- Crop concerns in the Plains are adding to the support this morning as the HRW crop came out of dormancy in worse shape than traders expected. On that front, rains through areas of the Central and Southern Plains yesterday were disappointing in the driest areas. But there are more rains in the near-term forecast.
- There are also hopes for more demand for U.S. wheat. Indian wheat is priced well above U.S. wheat and China is considering more U.S. spring wheat purchases amid disappointment with the gluten content of Canadian spring wheat shipments.
- Additional support is coming from a weaker U.S. dollar, which is also encouraging of the corrective trade.
April live cattle futures are mildly firmer, while deferred contracts are under light pressure. Feeder cattle futures are under pressure.
- Price action is light and choppy in live cattle futures as traders wait on direction from the cash cattle market.
- With nearby live cattle contracts in line to below last week's cash trade, selling interest is limited and mild short-covering is being seen this morning.
- Unless the boxed beef market strengthens, odds of higher cash cattle trade are not strong. Packers are struggling to move beef at high prices and margins are negative, prompting some talk processors may slow kill runs instead of paying higher prices for cash cattle.
- Feeder cattle futures are being pressured by the price recovery efforts in the corn market. And after three days of strong gains were halted yesterday, it appears the corrective recovery has run its course.
Lean hog futures are under pressure this morning
- The big premium spring- and summer-month lean hog futures hold to the cash index is weighing on the market this morning. While there are still hopes for a seasonal rally, traders feel hog futures are too far out in front of the cash market.
- Driving those concerns is the $1.05 drop in the pork cutout value yesterday and continued sluggish movement. Despite that decline, packer margins are still modestly in the black, giving them incentive to keep kill lines as full as possible.
- Cash hog bids are steady at most locations, although some firmer bids are surfacing in eastern locations.