Corn futures have firmed from the overnight session and are now 7 to 11 cents higher in old-crop while new crop is posting gains of 2 to 4 cents.
- Old-crop corn futures are benefiting on short covering amid ideas the downside was overdone in response to the USDA's bearish Quarterly Grain Stocks Report last month.
- Farmers have been unwilling to sell at current prices, keeping available supplies tight and basis levels around the country strong.
- A 2-cent rise in Gulf basis for immediate delivery this morning could signal fresh export demand news for these tight supplies.
- Traders are also readying positions for USDA's Supply & Demand Report tomorrow, in which USDA is expected to raise its corn carryover estimate by 192 million bu. to 824 million bushels.
- While rains moving across the western Corn Belt today and another system expected to enter the region tomorrow is beneficial for soil moisture profiles, this will keep farmers out of the field and could make it tough to reach projected plantings of 97.3 million acres.
- Late-week snow in the forecast for the northern and western Corn Belt would further delay planting season.
- Traders have brushed off news Brazil's government raised its corn crop estimate by 1.35 MMT to a record-large 77.45 MMT, as a large South American crop is "in" prices.
Old-crop soybean futures have firmed to trade 3 to 9 cents higher while new-crop is mixed amid bull spreading.
- Old-crop soybeans are benefiting from a 2-cent increase in Gulf basis for immediate delivery and steady to 6 cents higher basis for other months. This signals supplies are still tight and exporters may be taking advantage of the recent price break.
- News Brazil's Conab trimmed its production estimate for 2012-13 from 82.1 MMT to 81.9 MMT due to a drop in its yield estimate is also providing light support.
- But China National Grain and Oil Information Center lowered its 2012-13 soybean import forecast by 1 MMT to 59 MMT due to decreased soymeal demand due to bird flu and weak hog prices. This would be down marginally from last year and the first time in nine years imports have declined over the year prior.
- New-crop beans are being pressured by expectations precip (including snow) in the Corn Belt could delay corn plantings and shift acres to beans.
- Traders will also be focused on evening positions ahead of tomorrow's Supply & Demand Report that is expected to show around a 12 million bu. increase in carryover from March.
Wheat futures have reversed course to trade mostly slightly higher in Kansas City and Minneapolis. Chicago wheat continues to post slight losses.
- A number of sources focused on the fact that USDA's Crop Condition Report showed slight improvement in the amount of the winter wheat crop rated in the top two categories from the week prior, and are putting less attention on the fact that more wheat shifted from the "poor" category to the "very poor" category.
- The Pro Farmer weighted Crop Condition Index reveals the HRW wheat crop deteriorated 3 points to 274 on the 0 to 500 point scale. The SRW crop, on the other hand, improved 9 points to 371.
- Light support also stems from late-week chances for freezing temps as far south as Texas' northern panhandle.
- Traders are also readying for the Supply & Demand Report tomorrow, which is expected to show a 15 million bu. increase in carryover from last month.
Live cattle futures are off to a narrowly mixed start with nearbys favoring the upside and deferred months the downside.
- Friendly outside markets are encouraging light short-covering in live cattle futures this morning.
- Cash cattle expectations are thus far still up in the air. Nearby futures are at a discount to last week's mostly $128 cash cattle trade, which is encouraging some light short-covering.
- While showlist estimates are tighter this week, the boxed beef market continues to slide. Choice and Select prices fell yesterday, though movement did improve to 177 loads.
- Both prices and movement must improve to convince traders grilling season has finally helped the product market put in a low.
- Strength in the corn market is weighing on feeder cattle futures.
Lean hog futures are posting slight to moderate losses in all but the April contract, which is slightly higher.
- After posting gains yesterday, lean hogs are seeing profit-taking today amid ongoing concerns about the product market that is translating to diminished cash market demand.
- Packer profit margins are in the red as packers have recently paid up for supplies while pork prices have failed to rise. Thus, packers are paying steady to weaker prices for cash hogs today.
- In the voluntary market, the pork cutout value firmed a penny but movement was very light. In the mandatory market, pork cutout value prices slid 28 cents on movement of 412.2 loads.
- Selling interest in the April lean hog contract is being limited by the fact that it is trading in line with the cash hog index.