Corn futures have improved a bit to trade steady to a 2 cents lower.
- Traders are showing no interest in covering short positions ahead of USDA's Supply & Demand Report today. Pre-report expectations are for USDA to trim its 2013-14 carryover estimate by around 26 million bu. to 1.861 billion bushels.
- Light pressure comes from a reminder of favorable South American crop prospects. Conab pegged Brazil's corn crop at 78.8 MMT, which compares to its previous forecast range of 78.5 MMT to 79.8 MMT.
- Gulf corn basis is 1 cent weaker for immediate delivery, steady for January and up 2 cents for February shipment.
- A weaker U.S. dollar index today is helping to limit selling interest.
Soybeans continue to trade mixed with January through May futures 1 to 5 cents higher and far-deferred contracts marginally lower.
- The market is squarely focused on evening positions ahead of USDA's Supply & Demand Report at 11:00 a.m. CT. Traders expect USDA to lower its U.S. carryover peg to around 154 million bu., while pre-report expectations are for a slight increase in world ending stockpiles to 71.1 MMT,
- Pressure on deferred contracts stems from news Conab raised its soybean production forecast to a record-large 90.03 MMT, which compares to its November forecast for production to come in between 87.9 MMT and 90.2 MMT.
- The Chinese news agency Xinhua reports the U.S. Soybean Export Council as saying China will import 26 MMT of U.S. soybeans between September 2013 and August 2014. This would be a record.
- Light soybean sales by farmers ahead of USDA's reports, strong crushing margins and slow loading times due to frigid temps are lifting basis levels at interior locations today.
SRW and HRW wheat are posting losses of roughly 4 to 8 cents this morning, while HRS wheat is down 2 to 5 cents.
- Spillover from the corn market is giving bears an edge as they await USDA's balance sheet update today.
- Traders expect USDA to peg 2013-14 wheat carryover at around 553 million bu., which would be down 12 million bu. from last month.
- USDA is also expected to raise its world wheat stocks projection by 14.5 MMT to 178.8 MMT, which would be up sharply from year-ago.
- Meanwhile, Brazil's Conab raised its peg of the country's wheat crop to 5.36 MMT from 4.81 MMT last month.
- The market is not overly concerned about freezing temps in winter wheat country as much of the crop is protected by either snow or ice cover.
Live and feeder cattle futures are under pressure this morning.
- Profit-taking after yesterday's gains is weighing on cattle futures.
- Showlist estimates are up everywhere except Kansas this week, with Nebraska's numbers expected to be around 30,000 head above week-ago. This could make it tough for feedlots to get steady prices again this week.
- While Choice and Select boxed beef values rose by more than $1 yesterday, movement slowed to 127 loads. For feedlots to get higher prices for cash cattle this week, both prices and movement must improve.
- Last week cash cattle trade took place around $132 in the Southern Plains.
- Traders are also awaiting USDA's update to its feed supply estimates for near-term direction. While supplies are up sharply this year, so is demand.
- Price action in feeder cattle futures will be limited as nearby contracts are trading in line with the cash index.
Lean hog futures are posting slight to moderate losses this morning.
- Weakness in the cash hog market is encouraging sales in the lean hog futures.
- Demand is light to start the week, with the result being steady to lower cash hog bids. Packers have seen profit margins widen this week.
- The cash hog index has declined in recent sessions and it is now trading at just a slight premium to the December lean hog contract. This is limiting selling in the front-month contract.
- There are also concerns about the winter storm that is moving into the East disrupting red meat demand.
- Frigid Midwest temps and blowing snow is also making some producers unwilling to transport hogs.
- The pork cutout value firmed 3 cents yesterday, but movement was again on the light side at 304.57 loads.