Corn futures have softened to trade mostly 4 to 5 cents lower.
- News China rejected a 2,000 MT shipment of U.S. dried distillers grains (DDGs) is weighing on the market today, despite the fact that this has been anticipated for some time.
- More rejections are expected as Chinese quarantine authorities have increased inspections of U.S. DDG shipments.
- News Japan's use of corn in animal feed rose from 41.8% in September to 43.6% in October helps to limit pressure as this signals lower corn prices are rebuilding demand. However, this figure is still 3.9 percentage points below year-ago.
- Also, India's corn exports are expected to fall 38% from year-ago to 3 MMT in 2013-14.
- Spillover from the soybean market adds pressure on this thinly traded session.
Soybean futures have extended early losses to trade 6 to 8 cents lower in most contracts.
- Traders are focused on recent and expected rains in Argentina, which are overshadowing forecasts for continued high temperatures.
- The 6 to 10-day outlook is cooler and wetter for key growing areas of Argentina, however.
- Despite today's losses, the soybean market remains well within the bounds of its consolidation range between the December high and low. Strong demand for U.S. soy products remains an underlying source of support.
- Traders will likely remain reluctant to actively add long or short positions ahead of year-end as trading volume over the holidays is thin, making the market more prone to volatile price swings.
Wheat futures are down 3 to 5 cents in most contracts of all three flavors.
- Spillover from the corn and soybean markets are weighing on wheat futures this morning.
- Also, the market has recently sustained major chart damage, which is triggering technical-based selling.
- Traders have yet to see any definitive signs U.S. wheat prices have dipped far enough to attract active export business. Tomorrow's Weekly Export Sales Report will provide an update on this.
- Concern about another arctic blast early next week is limited. But above-normal temps currently in effect for some parts of winter wheat country are eroding protective snowcover.
Live cattle futures gapped higher on the open and are posting slight gains. Feeder cattle futures are also slightly higher.
- Thin trading volume helped the live cattle market to a gap-higher start.
- Traders are encouraged by firmer boxed beef prices Tuesday, which could improve cash prospects this week.
- Choice boxed beef rose 17 cents and Select firmed $1.46 on Tuesday; movement picked up to 158 loads.
- If strength continues today, feedlots may be able to get steady to firmer prices for market-ready supplies. Last week, packers in the Plains paid mostly $130 for cash cattle.
- Showlist estimates are notably tighter this week and frigid cold earlier this week stressed cattle. Another arctic blast is expected this weekend.
- However, back-to-back holiday weeks will limit packer demand, especially with packer profit margins buried deep in the red.
- Tight supplies, softer corn prices and a risk-on stance in equities following the holiday is lifting the feeder cattle market.
Lean hog futures are posting slight losses this morning amid limited trade.
- Those that returned to the market after a brief holiday break are favoring the downside as the technical posture of lean hog futures remains steady to lower. Uncertainty as to whether the market has put in a low continues to limit buying interest.
- Traders are also working to even positions ahead of Friday's Quarterly Hogs & Pigs Report, which is expected to show all hogs and pigs on Dec. 1 at 99.9% of year-ago.
- Early cash hog bids are steady as packers are in need of hogs for this week and the next.
- Temps are expected to warm somewhat and roads should be relatively decent for transporting hogs the next two days. With another wave of very cold temps and more snow forecast for early next week, producers may use the improved weather to get caught up on marketings today and Friday.
- The cash hog market was most recently projected at $79.47, more than $6 below the front-month.
- The pork cutout value firmed 40 cents Tuesday and movement surged to 506.54 loads, suggesting the product market may be putting in a low.